Strategy Halts Bitcoin Buys, Uses $205M for Preferred Stock Buyback

Strategy did not buy or sell any bitcoin in the week from October 19 through 25. The firm still holds 848,517 BTC, purchased for $64.02 billion at an average cost of $75,446 per coin.

Instead of acquiring bitcoin, the company used its cash to buy back $204.9 million of STRC preferred stock and maintained a $4.83 billion cash reserve, according to a company release.

Michael Saylor's firm built the largest corporate bitcoin stash globally by selling stock and issuing convertible debt, then using the proceeds to buy coins. That pattern has changed somewhat this year. Strategy has paused purchases several times and instead directed funds toward buybacks of its preferred shares.

The company has experienced periods of inactivity, ranging from a one-week halt in bitcoin purchases to a phase where it sold bitcoin after five weeks without buying.

In September, the company bought back $176 million of STRC in a single week and expanded its digital credit securities buyback program from $1 billion to $2 billion.

Preferred dividend of Strategy

STRC is a preferred share with a floating dividend, designed to trade around its $100 par value. When the shares fall below that level — as they have during recent market swings — repurchasing them reduces the preferred claim. Redeeming $100 of stated value for $86.52 cuts the claim by more than the cash spent, which lifts net bitcoin per share.

On Monday, October 26, bitcoin traded near $80,000 after slipping below that level in early Asian hours. A weekend selloff pushed the price into the low $79,000s, a level not seen in over a month.

Strategy's average cost of $75,446 sits below that price, so its holdings show a paper gain of roughly $3.9 billion. The $4.83 billion reserve covers preferred dividends and debt interest, according to company reporting.

Strategy's buyback capacity depends on preferred stock trading below par and on cash from common stock sales, a funding mix that has shifted toward stock sales this year.

The company has offered no timetable for resuming bitcoin buys.