Strategy opts for $176M STRC preferred stock buyback over Bitcoin acquisition
In a shift from its usual approach, Strategy bought back $176 million of STRC preferred shares and expanded its digital securities buyback initiative to $2 billion, temporarily halting Bitcoin purchases.
In an unusual move for the company holding the world's largest corporate Bitcoin reserve, Michael Saylor's Strategy chose to bypass its customary weekly Bitcoin purchase, instead directing $176 million toward buying back its STRC preferred stock.
According to a filing submitted to the US Securities and Exchange Commission on Tuesday, Strategy acquired 1.8 million shares of STRC stock for a combined total of $176.3 million during the period spanning Aug. 31 through Sept. 7.
Additionally, the firm announced it was expanding its Digital Credit Securities Repurchase Program by doubling its size to reach $2 billion. Without any fresh acquisitions this week, Strategy maintains its position with 845,050 Bitcoin (BTC), purchased at a cumulative cost of $63.6 billion, representing an average acquisition price of $75,412 per coin.
The previous week saw Strategy return to Bitcoin purchasing activity for the first time since mid June, executing a $370 million acquisition.
According to Yahoo Finance data, STRC's share price remained relatively unchanged during Tuesday's premarket trading session, sitting at $97.70, representing a 2.3% markdown from its designated $100 par value, whereas the company's common stock trading under the MSTR ticker on Nasdaq experienced a decline exceeding 3% at the most recent check.
As a primary funding mechanism for Strategy's Bitcoin accumulation strategy, STRC plays a crucial role. When shares trade beneath par value, it constrains Strategy's capacity to generate capital through STRC offerings and could compel the organization to raise its dividend rate even higher.
On June 29, Strategy announced a new capital framework that permits Bitcoin liquidation to support dividend payments and raised the annual dividend rate on its STRC preferred shares to 12%.
BTC treasury challenger Strive steps purchases
As Strategy chose to take a break from Bitcoin acquisitions last week, leadership at several other corporations ramped up their purchases of the leading cryptocurrency by market capitalization.
On Monday, CEO Matt Cole disclosed that Strive, which ranks as the fifth-largest corporate holder of Bitcoin, purchased 1,375 Bitcoin for $109 million, at an average price point of $79,281 per BTC, elevating its aggregate holdings to 24,531 Bitcoin. Prior to Tuesday's market opening, the firm's ASST shares trading on Nasdaq were lower by more than 2.5%, despite having more than doubled in value over the preceding month.
Capital B, a Bitcoin treasury company listed in France, also announced on Monday a $25 million Bitcoin purchase, marking its largest acquisition in nearly a year, propelling the French firm past H100 Group in the rankings of publicly traded BTC holders.