Strategy spends $192 million on preferred buyback, nine times its bitcoin buy

Strategy put nearly nine times as much money into buying back its own preferred stock as into bitcoin last week. The company said on Oct. 12 that it repurchased 1,932,145 shares of its STRC preferred stock for 192.4 million dollars between Oct. 5 and Oct. 11, while buying 250 BTC for 21.5 million dollars.

The bitcoin was bought at an average of 86,194 dollars per coin, fees included. Holdings now stand at 848,250 BTC, acquired for a combined 64.00 billion dollars at an average of 75,444 dollars per coin. Decrypt wrote on Oct. 12 that the purchase set a new record for the company's stash.

STRC, formally the Variable Rate Series A Perpetual Stretch Preferred Stock, was the only security Strategy bought back during the week. It repurchased none of its other preferred issues and none of its MSTR common stock, Unchained reported on Oct. 12.

The buyback authorization is shrinking. After the latest purchases, 354.8 million dollars remains under the company's digital credit securities repurchase program. The board doubled that program to 2 billion dollars in September, when weekly STRC repurchases had reached 176 million dollars, as covered at the time. A separate 1.0 billion dollar authorization covering MSTR shares is untouched.

Strategy has been buying STRC below its 100 dollar par value for weeks. It stopped selling new STRC shares through its at-the-market program in June after the shares slipped under that level, according to Unchained.

The week's bitcoin purchase was funded mostly with stock sales. The release said 21.0 million dollars came from net proceeds of selling 125,183 MSTR shares, with the remaining 500,000 dollars drawn from cash. Strategy sold no preferred stock under its at-the-market programs during the period, Decrypt noted.

The company keeps two separate dollar buckets for different purposes. A USD Reserve meant to cover preferred dividends and debt interest stood at 4.88 billion dollars as of Oct. 11, while USD Cash for broader uses including bitcoin buys and capital moves stood at 640.5 million dollars.

Both the buyback and the bitcoin purchase fall in the Oct. 5 to Oct. 11 window, the release shows. Traders on the Myriad prediction market put only a 5 percent chance on Strategy holdings passing one million BTC before 2027, according to the coverage.

The pattern extends a shift that has been building for weeks. In the prior week Strategy bought 29 million dollars in bitcoin and repurchased 176 million dollars of STRC, while posting a 21 billion dollar third-quarter gain. Chief executive Phong Le defended selling bitcoin as the right trade in September, weeks before the firm set a new holdings record at the end of that month with a 143 million dollar purchase, Decrypt wrote.

The reserve setup itself is recent. Strategy seeded its USD reserve with 1.44 billion dollars and later established the separate USD cash pot after raising 2 billion dollars by selling MSTR stock, as detailed in the coverage. In September, chief executive Phong Le defended selling bitcoin as the right trade, weeks before a 143 million dollar purchase set a new holdings record at month-end.

STRC is a variable-rate perpetual preferred issue with a 100 dollar par value. Strategy has spent recent weeks buying it back below that level while issuing no new shares of it, and the Oct. 28 vote would put STRC and three other preferred issues on daily dividend payments. The 1.93 million shares repurchased last week compare with 125,183 common shares sold to fund the week's bitcoin buying, as the Monday disclosures show.

Shareholders face a decision on the preferred program this month. They are scheduled to vote on Oct. 28 on a proposal to pay daily dividends on STRC and three other Strategy preferred issues, Unchained reported. The company has also proposed that those dividends accrue 365 days a year and has said it could sell up to 1.25 billion dollars of bitcoin under its digital credit capital framework.