Strategy Extends Bitcoin Pause to Five Weeks, Adds $525M Cash
In brief
- Strategy skipped Bitcoin purchases for fifth consecutive week, longest pause in two years
- Cash reserve reached $3.75 billion, covering 2.1 years of dividend obligations
- Company deployed $25 million to repurchase 288,930 STRC preferred shares
Cash Buildup Over Coins
Strategy sold 5,429,160 shares of MSTR common stock between July 20 and July 26, generating $544.5 million in net proceeds. The firm raised cash by selling MSTR stock rather than Bitcoin coins, a shift tied to a capital management framework adopted weeks prior that authorized selling up to $1.25 billion of Bitcoin.
Strategy's Bitcoin holdings remained at 843,775 BTC, untouched since a $35 million purchase in June. The cash reserve now covers 2.1 years of dividend payments, against the $1.76 billion the firm owes annually in preferred dividends and debt interest. It has $22.98 billion of additional MSTR capacity remaining.
First Preferred Buyback
Strategy purchased 288,930 Stretch (STRC) shares for $25 million in its first preferred stock buyback. The purchase drew on the $1 billion Digital Credit Securities Repurchase Program the board approved on June 29, leaving $975 million available from that authorization.
STRC has traded below its $100 par value since mid-May. At the time of reporting, STRC was trading at $88.61 in pre-market trading, up 1.99%.
Metric Overhaul and Earnings Ahead
Last week the firm overhauled its investor metrics and debuted "net Bitcoin per share," which strips out $22.2 billion of debt and preferred claims to show what common shareholders own. Strategy also redefined mNAV with an accretion threshold fixed at 1.0x. On the new measure, the stock traded at 1.02x — just above the threshold below which issuing new shares to buy Bitcoin would dilute existing holders.
Bitcoin traded at around $65,000 on Monday, putting Strategy's Bitcoin stack $8.5 billion below the $63.69 billion it paid. The company reports second-quarter earnings on Thursday.
