Strategy has changed how it allocates capital. Instead of buying more Bitcoin, the company carried out its first buyback of its own STRC preferred shares. It spent $25M on the transaction while increasing its cash reserve to $3.75B through MSTR share sales. Meanwhile, its Bitcoin holdings remained unchanged at 843,775 BTC.
The transaction marks the first buyback under the company's $1B Digital Credit Securities Repurchase Program, which was approved on June 29. After completing the purchase, Strategy still has approximately $975M remaining under the program.
Strategy Chairman Michael Saylor said the company will repurchase STRC on a regular basis. The size of future buybacks will depend on how deeply the shares trade below par: the larger the discount, the more aggressively Strategy will buy them back.
“Our goal is for STRC to trade at around $100, supported by high liquidity, low volatility, and healthy, sustainable independent demand,” he wrote.
Strategy also said it has no plans to issue new STRC shares below face value. The annual dividend rate of 12% will remain in place until STRC consistently trades near $100.
Cash Reserve Reaches $3.75B
Strategy said the STRC buyback is being financed separately from its cash reserve. Funding will come from future MSTR share sales and, if necessary, from selling part of its Bitcoin holdings. The cash reserve itself may only be used to pay dividends on preferred shares and service the company's debt.
Read also: Strategy Sold 3,588 BTC for $216 M
During the latest reporting week, Strategy raised $544.5M in net proceeds by issuing 5.4M MSTR shares through its ATM program. As a result, the company's cash reserve increased by $525M, reaching $3.75B.
Strategy estimates that this amount is enough to cover approximately 2.1 years of dividend payments and interest expenses, which total about $1.76B annually.
Fifth Consecutive Week Without Bitcoin Purchases
Strategy's Bitcoin holdings remained unchanged at 843,775 BTC. The company has now gone five consecutive weeks without buying Bitcoin. Its last purchase was on June 22, when it acquired 520 BTC for approximately $35M.
Community Reaction
Strategy supporters and MSTR investors described the move as a rational decision. They pointed out that the company maintained its Bitcoin holdings, increased its cash reserve to cover more than two years of obligations, and bought back STRC at a discount to face value. In their view, this will reduce future dividend payments and strengthen Strategy's credit profile.
Some commenters also noted that the STRC buyback is being financed separately from the company's cash reserve. They believe that once STRC returns to trading around its $100 par value, Strategy could issue new STRC shares in the future and use the proceeds to buy more BTC.
Criticism came primarily from Peter Schiff and some other commenters. They argued that selling MSTR shares to fund STRC buybacks dilutes existing MSTR shareholders without creating additional value for them. Some also questioned the investment appeal of MSTR itself.
Some users described the move as a reallocation of capital within the same company and questioned why Strategy chose to increase its cash reserve and launch the buyback instead of continuing to accumulate BTC.
Across both discussion threads, users also raised questions about the source of the buyback funding, discrepancies in reported revenue figures and expenses, and made ironic remarks about Strategy shifting from aggressively accumulating Bitcoin to protecting its cash reserve and supporting its preferred share structure.