Strategy expects future bitcoin sales to help finance preferred stock repurchases, extending a funding strategy the company has already used while targeting disciplined buybacks of STRC and more stable trading in the preferred stock.
Strategy Opens the Door to Bitcoin Sales—Michael Saylor Explains Why It Makes Sense
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Key Takeaways
- Michael Saylor explained that Strategy may fund STRC repurchases through MSTR stock sales or bitcoin sales.
- The company plans to adjust STRC repurchases according to market price and liquidity.
- Saylor’s objective centers on stronger liquidity, lower volatility, and sustainable independent demand for STRC.
Why Saylor Anticipates More Bitcoin Sales
Michael Saylor, Executive Chairman of Strategy Inc. (Nasdaq: MSTR), revealed on July 27 in an X post that future STRC repurchases may be funded through either bitcoin sales or MSTR stock sales, depending on market conditions. STRC is Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, carrying a $100 stated amount and a dividend rate that management evaluates monthly.
Bitcoin sales could become an attractive financing option when STRC trades sufficiently below $100, allowing the company to retire preferred shares at a discount.
Saylor said the company aims to keep STRC trading near its $100 stated amount with high liquidity, low volatility, and sustainable independent demand. Under Strategy’s digital credit capital framework, it does not intend to issue additional STRC below $100.
Discounted Buybacks Guide the Purchase Pace
During the week ending July 26, the company repurchased 288,930 STRC shares for approximately $25 million at an average price of $86.52 per share, the company announced on July 27.
Saylor presented Strategy as a regular and disciplined buyer below $100, with repurchases increasing at deeper discounts and tapering as STRC approaches its stated amount. Another $975 million remains available under the company’s preferred securities repurchase authorization, giving management substantial capacity for future transactions. At the latest average purchase price, the company acquired each STRC share for $13.48 below its stated amount before accounting for future dividend savings.
Strategy President and CEO Phong Le explained:
“At prices below $100 per share, STRC repurchases represent an attractive allocation of capital because they can reduce future preferred dividend requirements at a discount.’
“We intend to scale our purchases according to both price and liquidity—more at deeper discounts and less as the STRC trading price approaches $100 per share—while allowing independent market demand to establish a healthy and sustainable market,” he added.
The company’s STRC terms and dividend policy outline the current 12% annualized dividend rate and the factors management reviews during monthly evaluations.
USD Reserve Stays Separate From Buybacks
Separately, Strategy increased its USD Reserve by $525 million through MSTR common-stock sales, raising the balance to a record $3.75 billion. The reserve covers approximately 25 months of expected preferred dividend payments and remains dedicated to preferred dividends and debt obligations under Strategy’s board-approved policy.
That restriction leaves future STRC repurchases to be financed through other sources, including MSTR stock sales and, as Saylor outlined, bitcoin sales when market conditions justify them.
Rather than drawing from the USD Reserve, Strategy now has two principal funding channels for STRC repurchases: MSTR issuance and bitcoin sales when management believes the economics justify them. That flexibility allows the company to retire discounted preferred shares without tapping funds reserved for dividends and debt obligations.
