Strategy Buys Back 1.39 Million STRC Shares for $132.2…

Strategy repurchased approximately 1.39 million shares of its STRC perpetual preferred stock for $132.2 million last week, accelerating a capital-management strategy designed to support the security as it trades below its $100 stated amount. The company bought exactly 1,388,720 shares of Variable Rate Series A Perpetual Stretch Preferred Stock between August 10 and August 16, according to an August 17 filing with the U.S. Securities and Exchange Commission.The purchases imply an average price of approximately $95.20 per STRC share, below its $100 stated amount. Strategy financed the repurchases using proceeds from sales of its MSTR common stock. The company sold 3,458,866 MSTR shares during the week, generating $333.7 million in net proceeds. Rather than using that capital to acquire additional Bitcoin, Strategy allocated $132.2 million to STRC repurchases, $52.4 million toward STRC dividends and another $149.1 million to its U.S. dollar reserve.

Strategy Is Selling MSTR to Retire STRC Below $100

The transaction reflects the capital-allocation framework Strategy introduced on June 29. Under its Digital Credit Securities Repurchase Program, the company authorized up to $1 billion of preferred-security repurchases. Strategy has said it intends to buy STRC regularly while the security trades below $100, subject to liquidity, market conditions and other capital requirements. The company made its first purchase under the program in July, acquiring 288,930 STRC shares for approximately $25 million at an average $86.52 per share.Management argues that buying STRC below its stated amount can strengthen its capital structure because Strategy retires preferred securities at a discount while simultaneously eliminating the future dividend obligation attached to those shares. Strategy did not repurchase any STRF, STRK or STRD preferred shares last week, nor did it repurchase MSTR common stock. Following the latest transactions, $653 million remains available under its preferred-security repurchase authorization. A separate $1 billion MSTR repurchase authorization remains entirely unused.

No Bitcoin Purchase as Cash Reserve Hits $4.8 Billion

The most notable consequence for Bitcoin investors is what Strategy did not do. The company purchased and sold no Bitcoin between August 10 and August 16. Its holdings consequently remained unchanged at 840,447 BTC, acquired for an aggregate $63.36 billion at an average cost of $75,385 per coin. Strategy instead increased its U.S. dollar reserve by $149.1 million to $4.80 billion. The reserve is designed to support preferred-stock dividends and interest payments on outstanding debt rather than fund STRC repurchases.That represents a notable evolution of Strategy’s capital model. For years, equity issuance by the company was overwhelmingly associated with raising capital to acquire additional Bitcoin. Strategy can now issue MSTR while directing proceeds toward managing an increasingly complex collection of preferred securities and cash obligations. STRC is central to that system. The variable-rate perpetual preferred was designed to trade around $100 and provide income-focused investors with a relatively short-duration instrument within Strategy’s Bitcoin-backed capital structure.Buying back 1.39 million shares below $100 simultaneously reduces the amount of STRC outstanding and its future dividend burden. Strategy therefore spent the latest week shrinking one part of its capital structure rather than expanding its Bitcoin treasury — an increasingly important distinction as the company evolves from a straightforward corporate Bitcoin accumulator into an active manager of Bitcoin-backed credit securities.