Strategy Doubles STRC Buyback Limit to $2 Billion, Halts Bitcoin Purchases Again

Strategy has doubled the buyback limit for its STRC preferred stock to $2 billion from $1 billion in an effort to lift the shares back to their $100 par value.

CryptoSlate reported on Sept. 8 that Strategy’s board expanded the cap on its preferred-share repurchase program, including STRC, to $2 billion. The move secures additional buying capacity after the company had already used more than 80% of the previous authorization.

STRC traded at about $97 to $98 on Sept. 8, roughly 2% below its $100 par value. Sept. 8 was the date Strategy Chairman Michael Saylor had cited for a recovery in STRC’s price, but the shares failed to regain $100.

Strategy has steadily increased the size of its purchases since July to support STRC. From Aug. 31 through Sept. 7, it bought 1.81 million STRC shares for $176.3 million, at an average price of about $97.36 each. Cumulative buybacks have reached about $811.5 million. With only about $188.5 million left under the previous $1 billion limit, the increase raises remaining buyback capacity to about $1.19 billion.

Strategy’s weekly purchases have increased even as STRC moved closer to par. In the first week, the company deployed $25 million at an average price of $86.52. Weekly purchases then rose to $81.2 million, $108.6 million, $132.2 million, $136.4 million and $151.8 million. The latest $176.3 million purchase was the largest since the buyback program began.

As funds were concentrated on STRC buybacks, Bitcoin purchases stopped again. Strategy did not buy additional Bitcoin from Aug. 31 through Sept. 7. It also made no new share sales through its at-the-market, or ATM, program during that period. In the previous week, the company raised $602.8 million by selling MSTR shares, then spent $151.8 million on STRC buybacks and $369.7 million to purchase 4,603 Bitcoin. Bitcoin buying had resumed after about two months, only to halt again a week later.

The $176.3 million used for the latest STRC buyback came entirely from Strategy’s U.S. dollar cash holdings. As of Sept. 7, that cash balance stood at $1.44 billion and could be used for Bitcoin purchases or capital-structure management.

Strategy is focused on restoring STRC to the $100 level because it wants to use the security again as a funding tool. STRC is a perpetual preferred stock designed to keep its market price near its $100 par value by adjusting its dividend rate. Strategy has said it will not issue new STRC shares if they trade below par. STRC must therefore recover stably to $100 before the company can fully resume fundraising through new preferred-share issuance.

As of Sept. 7, Strategy held 845,050 Bitcoin. Its total acquisition cost was $63.73 billion, and its average purchase price was about $75,412 per coin.