Strategy Increases Bitcoin Holdings to 848,000 BTC While Repurchasing Preferred Stock
Company reports $20.91 billion quarterly gain on digital assets alongside $176.3 million in preferred stock buybacks.
Quick Look
- Strategy acquired 334 BTC for $28.7 million, reaching a record 848,000 BTC, while simultaneously repurchasing $176.3 million of its own preferred stock.
- The firm reported a $20.91 billion quarterly gain on its digital asset holdings.
AI-generated summary
Why It Matters
Strategy marks Bitcoin at fair value, leading to significant quarterly gains based on price appreciation. The company maintains a dual-focus strategy of Bitcoin accumulation and preferred stock buybacks.
Strategy bought 334 BTC last week and spent more than six times as much buying back its own preferred stock, according to a filing that also put the company's third-quarter gain on digital assets at $20.91 billion.
The Bitcoin was bought between October 1 and 4 at an aggregate $28.7 million, an average of $85,838.80 a coin, taking Strategy's holdings to 848,000 BTC. That marks a fresh record for the Bitcoin treasury company, a week after the company passed its June high. It bought nothing in the final three days of September.
Against that, Strategy repurchased 1,033,168 Stretch (STRC) shares for $102.6 million in the last days of September and a further 740,634 for $73.7 million in the first four days of October, $176.3 million in all. Of that, $154.1 million came from its USD Cash balance and $22.2 million from interest earned on cash and short-term investments. The preferred buyback program has $547.2 million left.
Strategy sold 92,894 MSTR shares for $15.7 million in net proceeds, all of which went into Bitcoin, with another $13 million drawn from USD Cash. None of its four preferred lines were sold through the at-the-market program during either window.
Its dollar balances are now split between a USD Reserve of $4.88 billion, which covers preferred dividends and debt interest, and USD Cash of $833.4 million for general purposes including Bitcoin. In the week to October 4 it drew $142.5 million from the reserve for dividends and interest.
The quarterly gain is the largest figure in the filing. Strategy marks Bitcoin at fair value, so the $20.91 billion reflects price appreciation across the quarter, and it carries $1.88 billion of associated deferred tax expense.
Strategy's average cost across the whole position is $75,440.70, and the coins it bought last week cost nearly 14% more than that. The company is adding Bitcoin above its own basis in small amounts, while directing larger sums at a preferred stock that has traded below its $100 par value for months.
Open Questions
- What is the long-term impact of the preferred stock buyback on liquidity?
- Will the company continue to buy BTC above its average cost basis?
