Strategy is continuing its financial strategy by combining bitcoin purchases and preferred stock redemptions. Between October 12 and 18, Michael Saylor’s company acquired 267 BTC for $22.1 million. At the same time, it devoted $193.1 million to repurchase STRC securities. This operation comes as Strategy maintains a large reserve of bitcoins and its manager anticipates a return of the market to a bullish phase.
In brief
- Strategy acquires 267 bitcoins for $22.1 million, bringing its reserves to 848,517 BTC.
- Michael Saylor’s company repurchases 1.94 million STRC preferred shares for $193.1 million.
- Strategy increases its authorization to repurchase digital credit securities from $2 billion to $3 billion.
- Michael Saylor anticipates a return to the bull market, despite the macroeconomic obstacles weighing on bitcoin.
Strategy buys 267 bitcoins and strengthens its reserves
Michael Saylor’s Strategy company purchased 267 bitcoins between October 12 and 18, at an average price of $82,900 per unit. The company thus invested an additional $22.1 million in the first cryptocurrency. According to a document transmitted to the Securities and Exchange Commission (SEC) on Monday, its reserves now reach 848,517 BTC. This new movement confirms the continuation of its acquisitions despite greater expenditure devoted to preferred shares.
To finance this purchase, Strategy primarily used the $22 million obtained from the sale of 140,872 shares of MSTR common stock. This operation allowed it to finance its acquisition without mobilizing a significant part of its existing liquidity. At the same time, the company reserved its available funds for the repurchase of STRC securities. This breakdown shows that the company is pursuing two distinct financial objectives.
The amounts committed, however, illustrate a notable difference between the two operations. Strategy spent $193.1 million to repurchase 1.94 million shares of STRC preferred stock. This sum represents almost nine times the amount invested in the new bitcoins. The company also increased its authorization to repurchase digital credit securities from $2 billion to $3 billion.
STRC redemptions exceed bitcoin purchases
Since the start of the fourth quarter, Strategy has spent $459.2 million repurchasing STRC stock. Over the same period, it invested $72.3 million in the acquisition of 851 bitcoins. Redemptions therefore represent more than six times the spending devoted to cryptocurrency. This difference confirms the growing place of operations on preferred securities in the company’s recent financial decisions.
STRC is a floating rate preferred stock designed to pay regular dividends. Strategy wants to buy back securities that are trading below their par value of $100 in order to support their price. This policy partly explains the importance given to these operations. It also allows the company to act on the value of its securities while maintaining its bitcoin reserves.
To cover its financial commitments, Strategy says it has $4.83 billion earmarked for preferred stock dividends and interest on its debt. It also has $447.3 million in separate cash. These reserves provide room for maneuver to honor payments. However, the evolution of expenses between purchases of cryptocurrencies and redemptions of securities will remain an important element to follow.
Saylor anticipates the return of a bull market
Despite these larger buybacks, Michael Saylor remains optimistic about bitcoin’s prospects. During a discussion held during ParaFi’s Investor Day on Saturday, he said: “ We are once again entering a bull market. » He notably mentioned the return of the price above its 200-day simple moving average. This indicator is often used to observe long-term price trends.
Saylor also cited several factors that could hold back the market. According to him, restrictive trade, foreign and monetary policies constitute obstacles for BTC. Conversely, growing adoption by banks and tokenization of traditional financial assets could support its development. These elements fuel its expectations, without however guaranteeing a lasting increase in prices.
On the markets, MSTR shares rose by more than 2.5% in pre-opening Monday according to Yahoo Finance dataafter losing around 9.6% on Friday, to $138.83. STRC shares at the same time gained nearly 0.8%, to $98.45, after a decline of 1.8% during the previous session.
In the short term, Strategy should therefore continue its trade-offs between accumulation of bitcoins and management of its preferred shares. The pace of STRC’s repurchases, the evolution of its reserves and market conditions will determine the continuation of this policy. The lasting return of bitcoin above its technical benchmarks could also weigh in the company’s next decisions.
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