Strategy Stops Bitcoin Trades and Uses Cash to Repurchase Preferred Stock

Strategy (MSTR) reported that between September 8 and September 13 it made no Bitcoin purchases, no Bitcoin sales, and no issuances under its at‑the‑market (ATM) program. The company’s cash balance fell to $1.30 billion after using $139.3 million to repurchase 1,420,467 shares of its STRC preferred stock.

Balance‑sheet actions

Bitcoin holdings remained unchanged at 845,050 BTC, acquired for $63.73 billion at an average cost of roughly $75,412 per coin. Total USD assets are $6.4 billion, comprising $5.10 billion in a dedicated reserve and $1.30 billion in working cash.

Preferred‑stock repurchase

The repurchase was funded entirely from cash, not from equity issuance or Bitcoin sales. The average price paid was about $98 per preferred share, below the $100 stated amount, effectively retiring a 12 % annual dividend obligation at a discount.

Remaining authorisations

• $1.05 billion authorized for further preferred‑stock repurchases
• $1.00 billion authorized for common‑stock purchases under the ATM program

Context and implications

Since July, Strategy has spent roughly $811.5 million on preferred‑stock buybacks, more than twice the $370 million spent on its most recent Bitcoin purchase (4,603 BTC on August 31). The pause in Bitcoin buying and the halt to ATM issuances suggest a shift from the company’s traditional capital‑allocation model toward balance‑sheet management.

Potential drivers

Management indicated that retiring preferred shares below par reduces future dividend payments and offers a return comparable to the company’s cost of capital. The decision may reflect a view that current Bitcoin prices are only marginally above the company’s blended cost basis, making further accumulation less attractive.

Index‑inclusion dispute

In early September, Strategy’s leadership asked MSCI to withdraw a rule that could remove the company from global benchmarks. Retaining MSCI inclusion would preserve passive‑fund demand for the stock, which has historically supported its premium to net‑asset value.

Outlook

With Bitcoin purchases, ATM issuances, and share count growth all paused, the company’s future capital‑allocation strategy will likely hinge on the relative attractiveness of additional Bitcoin purchases versus further preferred‑stock retirements.