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Scott Melker discusses how Strategy (MSTR) has repurchased $176 million of its preferred stock, marking a pivot away from the firm’s bitcoin-buying (BTC-USD) strategy.
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Strategy has repurchased $176 million of STRC and increased the size of its digital credit securities repurchase program from $1 billion to $2 billion. They still hold 845,050 Bitcoin and $6.5 billion of USD assets.
So the story here obviously is that they spent money this week repurchasing STRC, trying to push that up back to par near $100. Last I checked, it was floating between $97 and $98.
So it is almost there and this is seemingly starting to work. The question being what will happen when it does return to par? Will they start using STRC once again as their Bitcoin buying machine? But perhaps the biggest story is how they did this.
This week they did not dilute Micro strategy or strategy holders and shareholders. They used the second cash reserve that they’ve been building that we’ve been telling you about to buy back this STRC.
So they did not touch their original cash reserve, which is used for these dividend payments and expenses.
They use the cash that they had raised secondarily that gave them optionality for buying back MSTR, buying back STRC, buying Bitcoins.
That flexible USD cash declined from approximately 1.61 billion to 1.44 billion, and once again, their Bitcoin holdings remained untouched. So they bought no strategy this uh Bitcoin this week. They sold no Bitcoin this week.
It seems that strategy has found something else they like at a discount, which is their own securities.
Now, as I’ve told you many times, strategy, uniquely among the Bitcoin Treasury companies, has the scale and liquidity to defend its very complex capital structure.
The companies copying it, uh, do not necessarily have those advantages.
Source: finance.yahoo.com