Strategy Buys Back $1.5 Billion of 2029 Convertible Notes, Makes No New Bitcoin Purchase Disclosure for Last Week

Strategy completed a $1.5 billion repurchase of convertible notes due in 2029. Following its previously disclosed large Bitcoin purchase, the company did not separately disclose any additional buying last week, underscoring its focus on capital structure management.

In a press release issued May 26, Strategy detailed capital markets activity and Bitcoin transactions conducted from May 11 to May 25. The activity included a $1.5 billion repurchase of 0% convertible senior notes due in 2029, the use of cash reserves, and issuance under financing programs tied to common and preferred stock.

Strategy repurchased $1.5 billion in principal amount of the 2029 convertible notes for about $1.38 billion in cash, or roughly an 8% discount to par. The outstanding balance of the notes fell to $6.7 billion from $8.2 billion.

The company said the debt repurchase generated BTC Yield of 0.7%, BTC Gain of 4,391 BTC and BTC $ Gain of $333 million. BTC Yield is Strategy's internal performance metric measuring the increase in Bitcoin holdings on a per-common-share basis.

Strategy also issued an additional $2 billion of Variable Rate Series A Perpetual Stretch Preferred Stock, or STRC, and $84 million of Class A common stock, or MSTR. It said the proceeds were used to buy 24,869 BTC. That purchase, however, was the previously disclosed acquisition made between May 11 and May 17, and the company did not separately say whether it bought more Bitcoin between May 18 and May 25.

After the transactions closed, Strategy held 843,738 BTC as of May 25. Its Bitcoin holdings per common share stood at 220,900 satoshis. Outstanding convertible notes totaled $6.7 billion, while the stated amount of preferred stock was $15.5 billion.

Dollar reserves stood at $871 million. Strategy said it plans to gradually rebuild those reserves depending on market conditions. The company manages the reserves as liquidity to support preferred dividend payments and debt interest payments.

For the year to date, Strategy reported BTC Yield of 13.3%, BTC Gain of 89,378 BTC and BTC $ Gain of $6.8 billion. The results reflect its strategy of expanding Bitcoin holdings while adjusting its capital structure.

Michael Saylor, Strategy's founder and executive chairman, said the transaction demonstrates the optionality built into the company's capital structure and its dynamic multivariable capital allocation model. He added that Strategy has the flexibility to fund strategic transactions using cash, digital equity, digital credit and digital capital.

Chief Executive Officer Phong Le said on the company's first-quarter earnings call that it would proactively manage convertible debt and use every available capital management tool, including measured Bitcoin sales. He said the latest transaction reflects that approach.

Chief Financial Officer Andrew Kang said the repurchase of the 2029 convertible notes is positive for investors from both an equity and credit perspective and shows the company's continued focus on debt management. Strategy remains committed to maintaining a strong cash reserve to support the credit quality of its digital credit securities, he added.