Strategy bought 250 Bitcoin (BTC) for $21.5 million last week while spending nearly nine times as much, $192.4 million, to buy back its own preferred stock.
Key Points:
- Strategy added 250 BTC between Oct. 5 and Oct. 11, lifting its holdings to 848,250 BTC.
- The company spent $192.4 million repurchasing STRC preferred shares during the same week.
- Weekly Bitcoin purchases have shrunk from 1,665 BTC to 250 BTC in two weeks.
Strategy Bitcoin Purchase
The company acquired the coins between Oct. 5 and Oct. 11 at an average price of $86,194 each, including fees, according to a press release it published Monday. The purchase lifted its holdings to 848,250 BTC, bought for about $64 billion at an average cost of $75,444 per coin. Bitcoin hovered near $83,000 on Monday, below what Strategy paid last week.
Strategy funded the deal by selling 125,183 shares of its MSTR common stock for $21 million and covered the remaining $500,000 with cash. It also repurchased 1,932,145 shares of STRC, its variable-rate preferred stock, for $192.4 million, up from $176.3 million a week earlier.
Executive chairman Michael Saylor hinted at the update Sunday, writing that there is "always room for more orange."
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Saylor Dilution Concerns
The slowdown does not stem from a lack of money, as Strategy held $4.88 billion in its dollar reserve and $640.5 million in cash as of Oct. 11. Saylor laid out the reasoning on Feb. 5, saying that "when our equity trades weak, we don't sell it." Selling new MSTR shares at low prices cuts the amount of Bitcoin tied to each existing share, so the company has leaned on preferred stock and cash instead.
Outside observers see limits to that approach. TD Cowen raised its Bitcoin forecast on Oct. 8 to roughly $109,000 by year-end, but kept its $260 price target on Strategy, saying dilution and financial obligations will likely cap gains for shareholders. Gold advocate Peter Schiff has argued the company lost its buying power once the stock sales that funded its earlier sprees dried up.
Strategy shares fell 7% last week, closing Friday at $154.34.
The smaller purchases cap months of shifting tactics. Strategy sold Bitcoin in late May for the first time since 2022, then sold more over the summer to pay preferred dividends and fund STRC buybacks before returning with a 4,603 BTC purchase in late August. Its weekly additions have since faded, sliding from 1,665 BTC in late September to 334 BTC in early October and 250 BTC last week.
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