**Michael Saylor**-led Strategy ended a two-week buying hiatus and added 950 Bitcoin (BTC) last week, but during the same period it appears to have put more than twice as much cash into purchasing STRC preferred stock treasury shares.
Key points
Strategy purchased 950 Bitcoin for $75.7 million and increased its holdings to 846,000.
It also repurchased 1,771,238 shares of the same class of STRC preferred stock for $174 million.
Both transactions were executed using existing cash holdings only, with no new share issuance to raise funds.
Strategy bitcoin purchase trend
In a filing submitted to the U.S. Securities and Exchange Commission (SEC) on September 21, Strategy said (link) that it purchased bitcoin from September 14 to 20, spending $75.67 million in total, or $79,670 per coin including fees. As a result, the company’s total bitcoin holdings increased to 846,000 BTC, with a cumulative purchase price of $63.8 billion and an average acquisition cost of about $75,416 per coin. No additional share issuance was used for this purchase.
During the same week, the company said in a separate filing (link) that it bought 1,771,238 shares of STRC preferred stock as treasury stock for $174 million. As a result, the remaining authorization under the preferred share repurchase program was reduced to $875.1 million. There were no additional purchases of other classes of preferred stock or common stock during the period.
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Saylor’s STRC treasury share strategy
The amount Strategy spent on treasury share purchases exceeded the company’s bitcoin purchase amount for the same week by $98.3 million. Strategy funded both transactions from its U.S. cash account (USD Cash), not by issuing new shares. That means its cash cushion is shrinking quickly. The company’s USD Cash balance fell from $1.3 billion to $1.05 billion over the course of a week, down about 20%. Provisions set aside separately for dividends and interest repayments also edged down from $5.1 billion to $5.04 billion during the same period.
Management has previously argued (link) that if it buys STRC trading below its $100 par value, it can reduce future dividend obligations while also having the effect of retiring the preferred shares at a discounted price.
STRC traded in the premarket on Monday at $98.85, while its Strategy common stock surged 7.4% to $165.20. At the same time, bitcoin moved around $84,925. Strategy’s bitcoin positions are estimated to be carrying unrealized gains of about $8.05 billion.
Strategy’s bitcoin buy ‘breather’ ends
This bitcoin purchase marked the end of the trend in which Strategy had halted new bitcoin purchases by putting cash into only STRC preferred shares for two consecutive weeks (link). After expanding the preferred share purchase limit to $2.0 billion in the week ended September 7, the company allocated $176.3 million to STRC, and also made an additional purchase of $139.3 million in the following week. During this period, the number of bitcoin held remained unchanged at 845,050.
By acquiring an additional 950 BTC, Strategy’s holdings rebounded again to about 846,000 BTC, returning to the level it recorded at the end of the second quarter. The company had temporarily reduced its holdings by selling some bitcoin during July and August. The most recent large-scale purchase was at the end of August, when Strategy bought 4,603 BTC for $369.7 million using funds raised through issuing common stock.
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