Strategy buys 811 bitcoin alongside US$208.2M in preferred repurchases

A US$208.2 million preferred-stock buyback outweighed new bitcoin spending in a week of common-share issuance. Strategy Inc NASDAQMSTR NASDAQSTRC, the Tysons Corner, Va., bitcoin treasury and analytics software company, reported on Monday that it bought 811 bitcoin for US$65.5 million.

The Nov. 2 Form 8-K reports US$164 million of net proceeds from sales of 1,178,552 common shares. Of that money, US$65.5 million bought bitcoin and US$98.5 million went to general-purpose cash.

The US$208.2 million preferred repurchase came from that general-purpose cash account during the reporting period, Oct. 26 through Nov. 1. Strategy also drew US$43.4 million from its separate reserve to pay preferred dividends. The transactions issued more common equity while buying back the variable-rate Stretch preferred security.

Common shares last closed at US$130.51 on Nasdaq on Oct. 30, according to Google Finance's NASDAQMSTR page, timestamped 3 p.m. EST. Stretch preferred shares closed at US$99.10 on Oct. 30, according to its NASDAQSTRC page, timestamped 3 p.m. EST. Both quotes precede Monday's disclosure.

Cash Uses Exceeded New Share Proceeds

The Nov. 2 filing distinguishes the reserve intended for preferred dividends and debt interest from cash available for broader treasury purposes. Those broader uses can include bitcoin purchases, additions to the reserve and capital management.

General-purpose cash stood at US$242.4 million on Oct. 25, according to Strategy's Oct. 29 results. Adding the newly allocated proceeds and subtracting the preferred repurchase leaves the US$132.7 million reported at Nov. 1. The reconciliation shows that existing cash supplemented the new share-sale proceeds.

The reserve ended Nov. 1 at US$4.79 billion after funding the preferred dividends. That balance is separate from the US$132.7 million general-purpose cash account, so combining them would obscure the different purposes management assigns to each.

The Nov. 2 filing reports repurchases of 2,092,035 Stretch preferred shares during the reporting week. Strategy reported no common-share repurchases. It sold no preferred shares under its at-the-market programs during that period. The common-share sales figure includes shares sold but not yet settled as of Oct. 30.

After the week's purchases, US$748.6 million remained authorized for preferred repurchases at Nov. 1. The common-stock repurchase authorization remained unused at US$1 billion. These are permissions to spend, rather than additional cash balances.

More Bitcoin Does Not Establish More Exposure Per Share

Strategy reported 849,327 bitcoin held at Nov. 1, acquired for an aggregate US$64.08 billion including fees and expenses. Its reported average acquisition cost was US$75,451 per bitcoin. The new purchases averaged US$80,846, above that treasury-wide cost. The reported acquisition figures include fees and expenses, so the purchase average is an execution-cost measure rather than a contemporaneous bitcoin market quote.

The Oct. 29 results put year-to-date growth in bitcoin holdings at 26 per cent. They also reported a negative 3.7 per cent BTC Yield through Oct. 25. Monday's filing supplies no updated BTC Yield figure or share-count reconciliation establishing that bitcoin exposure per common share increased.

For common holders, the disclosed week combines additional bitcoin with additional common shares and fewer preferred shares outstanding. Preferred holders instead face a smaller outstanding Stretch share count and the new daily-dividend mechanics. Neither the purchase total nor the repurchase total alone describes all those changes.

The allocation adds to Mugglehead's coverage of financial structures across listed crypto businesses. Next Technology Holding Inc. NASDAQNXTT, an AI software and digital-asset company, authorized transactions involving its approximately 5,833 bitcoin on Oct. 30. Its release disclosed no completed sale or financing, whereas Strategy's filing reports executed purchases, repurchases and share sales.

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Daily Dividends Add A Dated Settlement Test

Strategy's Oct. 29 results said the Stretch daily-dividend schedule would start Nov. 1. The company's Oct. 28 filing on trading mechanics explains how weekend record dates interact with Nasdaq trading and settlement through The Depository Trust Company.

"Daily dividends are a natural step toward the tokenized, 24/7/365 financial system," Strategy president and chief executive Phong Le said in the Oct. 29 results.

The filing's next specified example groups three consecutive record dates, from Nov. 6 through Nov. 8. It gives Nov. 9 as the payment date for those dividends. Strategy expects a Nasdaq buyer on Nov. 6 to miss all three dividends because of next-business-day settlement, while a seller that day retains entitlement. It cautions that clearing arrangements and broker policies can produce different treatment.