So far this month, Strategy has spent far more on its own preferred shares than on Bitcoin: about $664 million on STRC buybacks against $72.3 million on 851 coins, Cointelegraph reported from the company's filings.
That is a change of habit for the largest corporate holder of Bitcoin, which built its treasury by selling stock and convertible debt and buying coins with the proceeds. The week of October 19 to 25 added nothing to the stack, and it took nearly half the company's dollar cash out the door.
Key numbers
- 848,517 BTC held, unchanged on the week, bought for $64.02 billion at an average of $75,446 per coin
- $204.9 million spent repurchasing 2.07 million STRC shares between Monday and Friday
- $242.4 million in USD Cash at the end of the week, down about 46% from $447.3 million
- $4.83 billion dollar reserve, unchanged, which company reporting says covers preferred dividends and debt interest
The cash balance fell by nearly half
Strategy disclosed the week in a Monday filing with the US Securities and Exchange Commission. It reported no Bitcoin transactions and no stock sales through its at-the-market program, according to Cointelegraph. Decrypt called it the company's biggest weekly STRC buyback in more than a month.
The backdrop was a weaker Bitcoin market. The coin reached $84,777 on Wednesday and then fell toward $80,000, according to CoinGecko data cited by Cointelegraph, with a weekend selloff taking it into the low $79,000s, a level not seen in over a month. It was trading around $79,992 at Monday's US equities open.
Strategy's common stock fell 2.2% to $142.80 in Monday premarket trading, while the STRC preferred shares edged down 0.01% to $99.35, Cointelegraph reported, citing Yahoo Finance.
Why buy back preferred shares instead of coins
STRC is a preferred stock with a variable dividend, designed to trade near its $100 face value, Bitcoin Magazine explained. During recent market swings the shares have traded below that level. Retiring $100 of stated value for $86.52 removes more of the preferred claim than the cash it costs, which lifts the Bitcoin held per common share.
In plain words: a preferred share is a claim that sits ahead of ordinary shareholders, paying a set or variable dividend before they see anything. When a company buys that claim back for less than its face value, the pile of assets behind each remaining ordinary share gets a little bigger. Here the pile is Bitcoin, which is why treasury companies watch the gap between the preferred price and par.
This is not the first pause. Bitcoin Magazine notes the company has halted purchases several times this year, including a stretch in which it sold Bitcoin after five weeks without buying. In September it repurchased $176 million of STRC in a single week and raised the size of its digital credit securities repurchase program from $1 billion to $2 billion.
What the filings do not say
None of the reports I read gives a timetable for resuming Bitcoin purchases; Bitcoin Magazine states plainly that the company has offered none. CryptoSlate reported that the buying streak ended after five consecutive weeks, and that cumulative STRC repurchases now exceed $2 billion.
Other treasury companies went the other way in the same week. CryptoSlate reported that Strive spent $511 million on Bitcoin, lifting its holdings to about 43,000 BTC.
At current levels the position is still above water. The Block put Strategy's holdings at roughly 4% of Bitcoin's total supply cap, with about $3.9 billion in paper gains against the $75,446 average cost.