Strategy Suspends Increased Holdings of Bitcoin; STRC Repurchase Scale Reaches $204.9 Million

Strategy repurchased $204.9 million of STRC preferred stocks within the week ending October 25th, and at the same time did not buy or sell any Bitcoin, therefore its holding of 848,517 BTC remained unchanged.

• Strategy repurchased 2,068,459 shares of STRC, and did not sell the shares through its plan to issue them at market price ( at-the-market ).
• The Bitcoin holding remains unchanged, with a cumulative purchase cost of $64.02 billion, including related fees.
• USD Cash dropped to $242.4 million, independent of the company's designated reserve fund of $4.83 billion.
• After the latest transaction was completed, the remaining balance for preferred stock repurchase was $956.8 million.

In a document submitted to the U.S. Securities and Exchange Commission on October 26, Strategy disclosed the aforementioned transaction. The company stated that the funds used for the repurchase by STRC came from its USD Cash balance, and claimed that no ordinary shares of MSTR were repurchased, nor were any other listed preferred stocks repurchased.

Executive Chairman Michael Saylor announced a rounded figure of $205 million on X, stating that as of October 25th, Strategy held $5.1 billion in assets.

The average repurchase price of STRC of Strategy is approximately $99.06 per share.

Dividing the $204.9 million in repurchase costs disclosed in the documents by 2,068,459 shares, we can determine that the average repurchase price per share of STRC is approximately $99.06. This calculation uses the rounded expenditure figures from the Strategy document.

The dashboard of company STRC shows that on October 23rd, at the close of trading, the price of this preferred stock was $99.36, which is $0.64 lower than its par value of $100. The dashboard lists a floating annual dividend yield of 12% and an effective yield of 12.08%.

Management had previously linked the repurchase to the trading price of STRC. During the second-quarter financial report conference call, CEO Phong Le stated that the company intends to buy back shares when the stock price is below $100 and will adjust the repurchase scale based on market prices and liquidity. He mentioned that repurchasing at a discount is a way to reduce future preferred stock dividend expenses.

Calculated at a par value of $100 per share, the par value of preferred stock corresponding to the latest round of repurchases is approximately $206.85 million. Comparing this amount with the disclosed repurchase cost, the difference is about $1.95 million.

Calculated based on the current annualized interest rate of 12% on the dashboard, the annualized dividend corresponding to the repurchased shares is approximately $24.8 million. This calculation assumes that the interest rate remains unchanged and is independent of any forecasts the company makes regarding future savings.

US dollar assets include reserves used for dividend and interest payments.

Strategy divides its dollar-denominated holdings into two categories. A portion, identified as USD Reserve, is used to support the payment of preferred stock dividends and debt interest, while the remaining amount, labeled as USD Cash, can be utilized for purchasing Bitcoin, replenishing reserves, and other capital management purposes.

The latest asset balance of $5.1 billion combines these two types of funds. A document dated October 26 shows that after the repurchase was completed, the reserve amounted to $4.83 billion, and USD Cash was $242.4 million.

A week ago, USD Cash was $447.3 million. After deducting the latest repurchase expenses, the balance dropped to $242.4 million, a decrease of about 45.8%.

In the previous reporting period, Strategy utilized $193.1 million of USD Cash to repurchase STRC, and additionally spent $100,000 on purchasing Bitcoin. According to a document submitted on October 19th, the company also paid $45.5 million in preferred stock dividends from designated reserve funds.

The disclosure on October 12 by the company showed that earlier on, its USD Cash balance was $640.5 million, and its reserve fund was $4.88 billion. Management stated that during that week, the company used $500,000 of USD Cash to purchase Bitcoin, while also receiving proceeds from the sale of common shares.

STRC The repurchase scale has exceeded the recent Bitcoin buying scale.

According to previous reports by crypto.news, Strategy purchased an additional 267 bitcoins between October 12th and 18th, spending $22.1 million on the transaction. This purchase brought his holdings up to and maintained at the level as of October 25th.

A document dated October 19th shows that the sale of 140,872 shares of MSTR generated a net income of 22 million US dollars, which nearly provided all the funds for the aforementioned Bitcoin purchases. During this period, the company did not sell any preferred stocks through its market-price issuance plan.

The previous week also showed a similar spending pattern. Strategy spent $192.4 million to repurchase STRC, and at the same time bought 250 units of BTC for $21.5 million. Including fees and expenses, the average purchase price of Bitcoin was $86,194.

During these three reporting periods, STRC's total repurchase amount reached 590.4 million US dollars, while the expenditure on purchasing 517 BTC units totaled 43.6 million US dollars. Based on this calculation, the expenditure on preferred stock repurchases is approximately 13.5 times that of Bitcoin purchases.

On October 19th, Strategy increased its authorized amount for repurchasing digital securities from $2 billion to $3 billion, including the repurchases that have already been completed. At the same time, at the end of the most recent week, its separate MSTR common stock repurchase plan still retains the full amount of $1 billion.