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Company Strategy repurchased STRC preferred shares worth $204.9 million, while making no purchases or sales of bitcoin during the week ended October 25, leaving its holdings at 848,517 BTC.
Strategy disclosed the transactions in a filing submitted to the U.S. Securities and Exchange Commission on October 26. The company funded the STRC purchases with its U.S. dollar cash and did not report any buybacks of MSTR common shares or other exchange-listed preferred shares.
Executive Chairman Michael Saylor announced the rounded figure of $205 million, stating that as of October 25, Strategy’s assets totaled $5.1 billion.
On average, the STRC shares purchased by Strategy cost approximately $99.06 per share
Dividing the reported purchase cost of $204.9 million by 2,068,459 shares yields an average of approximately $99.06 per STRC share. The calculation uses the rounded expense figure stated in Strategy’s report.
On the STRC dashboard, the company showed a share price of $99.36 at market close on October 23, which was 64 cents below the stated price of $100. The dashboard listed a variable annual dividend rate of 12% and an effective yield of 12.08%.
Previously, the company’s management tied share buybacks to the exchange price of STRC shares. During the second-quarter earnings discussion, CEO Phong Le said the company intends to buy back shares at prices below $100, with purchase volumes depending on the market price and liquidity. He characterized buying back shares at a discount as a way to reduce future preferred share dividend payment obligations.
At the stated amount of $100, the recent buybacks represent preferred shares worth approximately $206.85 million. Comparing this amount with the reported purchase cost yields a difference of approximately $1.95 million.
Using the current annual yield rate of 12% shown on the dashboard, the repurchased shares correspond to approximately $24.8 million in annual dividends. The calculation assumes the rate remains unchanged and does not depend on any of the company’s projections regarding future savings.
Dollar assets include a reserve for dividend and interest payments
Strategy divides its dollar assets into two categories. The U.S. dollar reserve is used to pay dividends on preferred shares and interest on debt obligations, while U.S. dollar cash is used to buy bitcoin, make reserve contributions, and for other capital management purposes.
The latest balance of $5.1 billion combines these categories. The October 26 report showed $4.83 billion in the reserve and $242.4 million in cash after the share buyback.
A week earlier, the U.S. dollar cash balance was $447.3 million. After subtracting the latest share buyback expenses, the balance came to $242.4 million, roughly 45.8% lower than before.
During the previous reporting period, Strategy used $193.1 million in cash to buy back STRC shares and another $100,000 to buy bitcoin. According to the October 19 report, it paid $45.5 million in preferred share dividends from the targeted reserve.
In information published by the company on October 12, it had earlier reported U.S. dollar cash of $640.5 million and a reserve of $4.88 billion. Management said that week it used $500,000 in cash to buy bitcoin, as well as proceeds from the sale of common shares.
STRC buyback volumes exceeded recent BTC purchase volumes
As previously reported, Strategy purchased another 267 BTC for $22.1 million between October 12 and 18. As a result of this purchase, the company’s asset balance reached the level that was maintained as of October 25.
According to the October 19 report, the sale of 140,872 MSTR shares generated $22 million in net proceeds, covering nearly the entire amount of the deal. During that period, no preferred shares were sold under the at-the-market offering program.
Last week showed a similar spending pattern. Strategy spent $192.4 million on the STRC buyback and also acquired 250 BTC for $21.5 million. The average bitcoin purchase price was $86,194, including fees and expenses.
Over three reporting periods, the STRC preferred share buyback totaled $590.4 million, while $43.6 million was spent acquiring 517 BTC. Thus, spending on preferred share buybacks was approximately 13.5 times greater than spending on bitcoin acquisitions.
On October 19, Strategy increased the authorized volume of digital credit securities available for buyback from $2 billion to $3 billion, including already completed transactions. The separate MSTR common share buyback program retained its full $1 billion capacity after the latest week.
