Strategy, a company known for its Bitcoin accumulation, announced on Monday that it sold approximately $105 million worth of Bitcoin last week. Concurrently, it offloaded 3.01 million common shares for $291 million and repurchased about $81 million of its STRC preferred shares, which were trading at a discount. These actions are part of a broader pivot aimed at strengthening its capital structure and shoring up its cash reserves.
Approximately $250 million from the sale of common stock contributed to increasing Strategy's dollar-based reserve pool, bringing it to a total of $4 billion. The remaining proceeds from the common stock sales, along with a portion of the Bitcoin sale, were used to repurchase the preferred shares and fund preferred stock dividends. Specifically, $52.4 million from the Bitcoin sale went towards dividends on its preferred stock, and $52.3 million was used for STRC share repurchases. The company’s Bitcoin holdings are now 842,138 BTC, down from 843,775 BTC, reflecting a 0.6% reduction from its peak in June.
This marks a significant shift from Strategy's previous strategy of relentless Bitcoin accumulation. The company had unveiled a capital framework in June allowing for up to $1.25 billion in Bitcoin disposals. With this latest sale, Strategy has utilized $321 million of that capacity. Executive Chairman Michael Saylor stated that these moves extended the company's USD duration by 57 days to 2.3 years and tightened STRC's Bitcoin credit spread by five basis points. Benchmark and H.C. Wainwright have maintained 'buy' ratings on Strategy, though Benchmark lowered its price target.
