Strategy Inc buys 250 bitcoin and repurchases US$192.4M of STRC
Common-share sales funded US$21 million of the bitcoin purchases, with another US$0.5 million supplied from cash.
Ines Halvorsen
During Oct. 5 to 11, 250 bitcoin were added to the treasury of Strategy Inc NASDAQMSTR NASDAQSTRC, the company said on Monday. The coins cost US$21.5 million, while a separate repurchase of its Stretch preferred stock cost US$192.4 million, according to its Oct. 12 update. Stretch is a variable-rate perpetual preferred security.
During the Oct. 5 to 11 period, Strategy sold 125,183 common shares for net proceeds of US$21 million after sales commissions, which funded bitcoin purchases. Another US$0.5 million of bitcoin spending came from general-purpose U.S. dollar cash. The update did not identify the funding source for the preferred-stock repurchases.
Google Finance's Oct. 9 quotes precede Monday's announcement. Common shares NASDAQMSTR closed at US$154.34, up 1.89 per cent, on Nasdaq at 4:00 p.m. EDT on Friday. Stretch preferred shares NASDAQSTRC closed at US$99.66 on Nasdaq at 4:00 p.m. EDT on Friday.
The purchases took Strategy's holdings to 848,250 bitcoin as of Oct. 11. Their aggregate acquisition cost, including fees and expenses, was US$64.00 billion, or an average US$75,444 per bitcoin. The next scheduled financial results are due Oct. 29.
The latest bitcoin purchases averaged US$86,194 per coin, including fees and expenses, during Oct. 5 to 11. That purchase price exceeded the company's average acquisition cost across its holdings. Strategy also operates an enterprise analytics software business alongside its bitcoin treasury and securities issuance.
Stretch Dividends Adjust Monthly
Strategy's preferred-stock information page says Stretch's annualized dividend rate for record dates beginning in October is 12 per cent, based on a US$100 stated amount. The company adjusts the rate monthly to encourage trading around that amount. Cash dividends are not guaranteed, and the rate may be significantly lower in future.
"The Company's preferred securities (STRF, STRC, STRE, STRK, STRD) are not collateralized by the Company's bitcoin holdings and only have a preferred claim on the residual assets of the company," Strategy says on its preferred-stock information page.
Strategy repurchased 1,932,145 Stretch shares during Oct. 5 to 11. It reported no preferred-share sales under its at-the-market programs during that period. After the purchases, US$354.8 million remained available under its preferred-stock repurchase program, while US$1 billion remained under the common-stock buyback program.
The Oct. 11 U.S. dollar reserve stood at US$4.88 billion and was intended to support preferred dividends and interest on outstanding debt. A separate general-purpose cash balance was US$640.5 million. Management may deploy that cash for bitcoin purchases, reserve expansion and broader capital management.
Bitcoin miners provide another listed-company comparison. Bitdeer Technologies Group NASDAQBTDR reported in its September filing that it mined 1,310 bitcoin in August. That figure measures production, while Strategy's weekly addition came from purchases financed through common-share sales and cash.
Read more: Bitdeer Technologies Group sells all 300.6 BTC in weekly update
Strategy's next scheduled reporting milestone is third-quarter earnings on Oct. 29, after U.S. markets close. A results webinar is scheduled for 5:00 p.m. EDT that day.
