- Strategy did not sell Bitcoin over the past week, but it sold $333.7 million of MSTR stocks.
- It used the proceeds to increase its cash reserves to $4.8 billion and repurchase $132.2 million worth of STRC preferred shares.
This Monday marks the eighth consecutive week since Strategy (MSTR) stopped announcing its Bitcoin (BTC) purchases. Since June 30, it has been all about either selling or holding its digital asset stash while raising cash reserves and repurchasing Perpetual Stretch (STRC) Preferred shares.
Strategy’s Bitcoin Holdings
The company’s latest Form 8-K filing at the US Securities and Exchange Commission (SEC) reveals it still hasn’t bought any Bitcoin. To date, it maintains 840,447 BTC, accounting for 4.19% of Bitcoin’s 20.07 million circulating supply.
Strategy’s disclosure indicates an aggregate purchase price of $63.36 billion for its Bitcoin reserves. The figures translate to an average purchase cost of $75,385 per BTC.
Strategy Raises Cash Reserves and Repurchases STRC Shares
The crypto community breathed a sigh of relief as Strategy didn’t add selling pressure to the market, which continues to navigate persistently bearish investor sentiment and macro headwinds. However, the business’s latest filing struck another blow to MSTR holders, as it shows that it sold approximately 3.46 million units of its common stock for $333.7 million.
The move resulted in an increase of its cash reserves from last week’s $4.65 billion to $4.8 billion. The stash can now cover up to 2.8 years of dividend payments for shareholders at its current $1.719 billion annual dividend obligation and $6.754 billion in total debt.
Additionally, Strategy allocated proceeds of its stock offering to repurchase around 1.39 million STRC shares for $132.2 million. It enables the institution to reduce its long-term dividend obligations from STRC preferred stocks, which generate the highest yield for investors at 12% annually.
By retiring these shares below their $100 par value, the firm generally captures a discount on its balance sheet liability. Moreover, it lowers the ongoing cash burn required to satisfy STRC’s semi-monthly variable payouts.
Community Feedback
Strategy continues to generate widespread criticism over the pause in its Bitcoin acquisitions and discounted sell-off of its common shares. Peter Schiff, Chair of Schiffgold, accused the company of bailing out STRC shareholders at the expense of MSTR owners.
The resident Bitcoin and Strategy basher also highlighted that by selling more discounted common stock, the company has effectively reduced its year-to-date BTC yield to 0.9%, showing a 93% decline in under three months. He emphasized that its Bitcoin yield is negative 7.3% this quarter, while STRC trades below $95.
However, others defended Strategy, arguing that Schiff’s logic was flawed. They pointed out that reducing exposure to high-yield dividend liabilities, particularly STRC, ultimately protects the firm’s long-term solvency and enterprise value.
Furthermore, some praised Strategy for holding the fort amid the ongoing long crypto winter.
