Strategy spent nearly nine times as much on STRC buybacks as Bitcoin last week

Strategy (formerly MicroStrategy) bought 250 Bitcoin for $21.5 million last week while spending $192.4 million to repurchase its STRC preferred shares.

On Oct. 12, the Michael Saylor-founded company disclosed that it acquired just 250 Bitcoin for about $21.5 million between Oct. 5 and Oct. 11, extending a slowdown that saw purchases fall to 334 BTC the previous week.

Meanwhile, Strategy repurchased 1,932,145 shares of its variable-rate STRC preferred stock for $192.4 million, nearly nine times its Bitcoin spending, as the company continued its STRC buybacks.

The spending gap highlights the competing demands on Strategy's capital: Bitcoin accumulation and support for its preferred securities.

STRC buybacks consume more capital

The latest acquisition lifted Strategy's holdings to 848,250 BTC, purchased for approximately $64 billion at an average price of $75,444 per coin.

Strategy paid an average of roughly $86,194 for its latest Bitcoin purchases, compared with $85,839 for the 334 BTC acquired during the previous reporting period.

The slowdown comes as Bitcoin struggles to sustain its recovery after last week's market downturn briefly pushed the cryptocurrency toward $80,000.

However, Strategy's preferred-stock repurchases have continued accelerating.

STRC repurchase spending rose from $176.3 million during Sept. 28–Oct. 4 to $192.4 million during Oct. 5–11.

The company reported $354.8 million of remaining authorization under its digital credit securities repurchase program.

The purchases have also become more expensive as STRC approaches its $100 stated amount.

Strategy paid an implied average price of approximately $99.58 per share in its latest buyback, representing a discount of less than 0.5% to the preferred stock's stated value.

That is notable because the company's July repurchase policy envisaged buying more aggressively at deeper discounts and reducing purchases as STRC approached $100.

The buybacks also reduce future dividend obligations by retiring outstanding preferred shares. At STRC's current 12% annual dividend rate, the latest repurchases would eliminate approximately $23.2 million in annualized dividend payments, assuming that rate remains unchanged.

However, Strategy's broader objective is to establish sufficient independent demand for STRC to trade consistently near $100 without requiring continued large-scale intervention.

Strategy's shrinking cash balance raises stakes for October vote

The accelerated repurchases are also drawing down the capital pool available for Strategy's broader treasury operations.

As of Oct. 11, the company held $4.88 billion in its dedicated USD Reserve and another $640.5 million in USD Cash, bringing total dollar-denominated liquidity to approximately $5.52 billion.

The USD Cash balance declined from $833.4 million a week earlier, down $192.9 million, nearly matching the amount spent on STRC repurchases.

Strategy separately raised approximately $21 million by selling 125,183 common shares during the week, while issuing no additional preferred stock under its at-the-market programs. Those common-stock proceeds funded $21 million of the Bitcoin purchases, with another $0.5 million coming from USD Cash.

The distinction between its two cash pools is significant.

Under Strategy's board-approved USD Reserve policy, the reserve is earmarked for preferred dividends and interest payments. Other uses require board authorization; the company says it is not authorized to use the reserve for STRC repurchases.

USD Cash, by contrast, can finance Bitcoin purchases, preferred-share repurchases and other capital management activities.

Consequently, sustained STRC spending reduces the unrestricted liquidity available for other uses unless Strategy raises additional funds.

As an illustration, the $354.8 million of remaining preferred-share repurchase authorization would cover about 1.84 weeks at the latest $192.4 million weekly pace if that pace and the authorization stayed unchanged.

Shareholders will vote on the daily-dividend proposal on Oct. 28.

The company is seeking approval to move its four US-listed preferred securities to daily dividend payments, with STRC transitioning first.

Under the proposal, dividends would accrue daily and be paid the next business day, replacing STRC's current semi-monthly schedule without increasing its annual dividend rate.

Strategy argues the change could improve liquidity, reduce reinvestment delays, and encourage more stable trading around STRC's $100 target.

If approved, STRC's first daily record date would be Nov. 1, with payment scheduled for Nov. 2.

Strategy is also scheduled to report third-quarter financial results on Oct. 29, a day after the vote, giving management another chance to address its preferred-stock strategy and the slowing pace of Bitcoin accumulation.