Strategy buys no bitcoin in week to October 25 and spends $204.9 million on STRC buybacks

Strategy Inc (Nasdaq: MSTR) bought no bitcoin (BTC) from October 19 to October 25 and spent $204.9 million of cash on repurchasing its STRC preferred stock, the company said in an 8-K filing on October 26.

What happened

Strategy said it did not sell any shares under its at-the-market offering program and did not purchase or sell any bitcoin in the week. As of October 25 it held about 848,517 bitcoin, bought for an aggregate $64.02 billion, or an average of about $75,446 per bitcoin including fees and expenses.

The company repurchased 2,068,459 shares of its Variable Rate Series A Perpetual Stretch Preferred Stock (Nasdaq: STRC) for $204.9 million, and paid for them with $204.9 million of what it calls USD Cash. Its USD Cash balance was $242.4 million on October 25, and its USD Reserve, which supports dividends on its preferred stock and interest on its debt, was $4.83 billion.

The filing says $956.8 million of the preferred stock repurchase authorization remains available, along with $1.0 billion under a program for its common stock, MSTR. It did not repurchase any MSTR shares in the week.

The background

The week before, Strategy bought 267 bitcoin for $22.1 million at an average price of $82,900, according to its October 19 filing. It funded the purchase with $22.0 million of proceeds from MSTR share sales and $0.1 million of USD Cash. In the same week it repurchased 1,938,780 STRC shares for $193.1 million.

On October 19 the company's board raised the authorization for its digital credit securities repurchase program to $3.0 billion from $2.0 billion. Over the two weeks to October 25, Strategy repurchased 4,007,239 STRC shares for $398.0 million (computed). Its USD Cash balance fell from $447.3 million on October 18 to $242.4 million on October 25.

The filing defines USD Cash as money management keeps for broader purposes that may include acquiring bitcoin, expanding the USD Reserve and other capital management uses.

Market reaction

Bitcoin closed at $80,053.16 on October 25, according to Coinbase Exchange daily data for the UTC day. That is 6.1% above Strategy's average purchase price of $75,446 (computed). The filing does not say why the company bought no bitcoin in the week.