Strategy put far more money into buying back its own preferred stock last week than into Bitcoin.
The company bought 267 BTC for about $22.1 million between 12 and 18 October, at an average of $82,900 per coin including fees, according to a filing with the US Securities and Exchange Commission on Monday.
In the same week, it spent $193.1 million repurchasing 1,938,780 shares of STRC, its variable-rate Stretch preferred stock. That is nearly nine times the amount it put into Bitcoin.
A small Bitcoin buy
The 267 BTC purchase follows 250 BTC bought the week before at $86,194 per coin.
Strategy now holds 848,517 BTC, acquired for about $64.02 billion at an average cost of $75,446 per coin.
Executive chairman Michael Saylor hinted at the purchase on Sunday, posting: “We found room for more orange.”
The Bitcoin buy was funded by selling 140,872 shares of Strategy’s common stock through its at-the-market programme, plus $0.1 million in cash. No preferred stock was sold during the week.
The buybacks are getting bigger
The STRC repurchase was paid for from Strategy’s USD Cash reserve, money set aside for general purposes including Bitcoin purchases.
It is the fourth large weekly buyback in a row. Strategy spent $192.4 million the previous week, $176 million the week before that and $151.7 million in the last week of September. Across the four weeks, that comes to about $713 million.
Strategy’s board has also raised the cap on its repurchase programme for these securities from $2 billion to $3 billion. As of 18 October, $1.16 billion remained available.
What is left in reserve
As of 18 October, Strategy’s USD Reserve held $4.83 billion and its USD Cash pool held $447.3 million, down from $4.88 billion and $640.5 million a week earlier. The company used $45.5 million from the USD Reserve to pay dividends.
The MSCI backdrop
The update comes days after MSCI finalised rules that could remove Strategy from its main stock indexes. Under the rules, companies whose balance sheets are dominated by a single asset will be ineligible from the close of 30 November.
MSCI will publish the list of affected companies on 11 November.
What happens next
Strategy has not explained the pace of the STRC buybacks in its filing. The key things to watch are whether the weekly repurchases continue at this size, how fast the USD Cash pool runs down, and the MSCI list on 11 November.
