Strategy Targets September for STRC Recovery Amidst $8.2 Billion Loss
After suffering an $8.2 billion loss in Q2 due to its exposure to Bitcoin's price swings, Michael Saylor's Strategy (formerly MicroStrategy) is targeting a September recovery for its STRC preferred stock. The company aims to revive the financing channel behind its goal of doubling Bitcoin per MSTR share within seven years.
The plan follows a second quarter that demonstrated Strategy's growing exposure to Bitcoin's price swings, with its $8.22 billion loss coming from an $8.32 billion loss on digital assets. Despite this, Strategy continued buying, increasing its holdings by 11% during the quarter to 846,000 BTC.
The company subsequently reduced its holdings to 843,775 BTC after selling selected coins to meet preferred-stock obligations, but purchases still exceeded disposals by more than 48 times. STRC's stated value nearly doubled during the second quarter, rising from about $5.3 billion at the end of March to $10.5 billion by June 30.
STRC has given Strategy another way to finance Bitcoin purchases, but it has also created a growing cash burden that must be managed when markets weaken. The company raised $7.53 billion through STRC during the first seven months of the year and its investor base broadened, with institutional holdings nearly tripling to $3.1 billion.
Strategy plans to maintain STRC's dividend rate at 12% and is targeting September 8 as an informal benchmark for returning STRC to par. The company has rebuilt its dollar reserve to $3.75 billion, extending estimated coverage to 2.1 years, and authorized $1 billion of preferred-stock buybacks.
Strategy Wants to Increase Bitcoin Per Share in 7 Years (Source: Strategy)To achieve this, the company plans to issue STRC and other preferred securities, retain part of the proceeds in its dollar reserve, and use the remainder to buy Bitcoin without producing the same immediate dilution as an MSTR sale.
Le said: “Our overall objective is to double Bitcoin per share in seven years through digital credit.” The target implies growth of roughly 10% annually through 2033 in the amount of Bitcoin represented by each diluted MSTR share. STRC recovery underpins Strategy's goal and returning it to par would allow Strategy to resume issuing the preferred stock at terms that support its longer-term Bitcoin strategy.