Strategy Raised $164 Million Selling MSTR. Only 40% Went to Bitcoin.

Last week, we thought Strategy might wait for buyers to return to STRC before buying more bitcoin. Instead, it tapped its common-stock ATM. Strategy sold 1,178,552 MSTR shares, used $65.5 million to buy 811 BTC, and put the other $98.5 million into USD Cash. It sold no STRC. For someone who held 100 MSTR shares through the week, gross bitcoin backing on an assumed diluted basis fell by roughly 30,900 sats. November 2 8-K · Last week’s filing analysis

What it would have taken to hold sats per share flat

Strategy finished the week with 849,327 BTC. Its bitcoin holdings grew about 0.10%, while its assumed diluted shares outstanding (ADSO) grew 0.26%. That made the week dilutive on both share counts. Strategy’s bitcoin ledger · Issuer share table

Keeping 60% of the proceeds in cash explains much of the decline. But even if Strategy had put every dollar into bitcoin at its reported average price of $80,846, the $164 million would have bought about 2,029 BTC. It needed roughly 2,212 BTC to maintain the previous week’s backing across the larger diluted share count. With 811 BTC purchased, gross backing per diluted share fell 0.165%. The reported holdings rose by 810 BTC. The filing gives no reason for the one-BTC difference from the purchase figure. Accretion calculator · Strategy dashboard

What $208 million of STRC buybacks bought shareholders

Strategy paid an average of $99.52 to retire 2,092,035 STRC shares. Buying just below the $100 stated amount saved about $1 million against par. The bigger benefit is the dividend bill. At STRC’s current 12% variable rate, each retired share takes $12 off the annual run rate, or $25.1 million a year for this buyback. Across the last two weeks, Strategy has removed nearly $50 million in annualized dividends at that rate. STRC terms and repurchase history · October 26 8-K

The cash movement shows why the common raise mattered. Strategy began with $242.4 million in USD Cash, added the $98.5 million from MSTR sales and spent $208.2 million on STRC. That left $132.7 million, less than the cost of another buyback of this size. Separately, Strategy paid $43.4 million of preferred dividends from its USD Reserve, which ended the week at $4.79 billion. Strategy’s cash and reserve update

On Thursday’s earnings call, CEO Phong Le said preferred issuance should be the primary way Strategy buys bitcoin. He left room to sell MSTR when its valuation premium makes that attractive. For the week that included that call, Strategy was still the buyer providing liquidity to STRC holders near par. The next sign of progress for MSTR holders would be seeing Strategy on the other side of that trade, selling new STRC near $100 and using the proceeds to buy bitcoin without issuing more common shares. Earnings call transcript · Our earnings analysis