Strategy Sells 1,638 Bitcoin, Funds Dividends and Buybacks

Strategy sold 1,638 Bitcoin from July 27 through Sunday, marking its second-largest BTC sale of the year.

Strategy sold 1,638 Bitcoin at an average price of $63,957 for a total of $104.7 million, according to a Monday 8-K filing with the Securities and Exchange Commission. Of the proceeds, $52.4 million was used to fund dividend payments on Strategy’s STRC preferred stock, while another $52.3 million was used to repurchase STRC.

The company now holds 842,138 Bitcoin bought at an aggregate cost of $63.5 billion.

Strategy sold 3,588 Bitcoin for about $216 million on July 6. It also disclosed the sale of 32 Bitcoin in early June, its first reported Bitcoin sale since the 2022 tax-loss transaction.

Strategy bolsters USD reserve to $4 billion, repurchases STRC stock

Strategy also reported raising $290.6 million through MSTR share sales during the same period. Of the proceeds, $250 million was used to increase the US dollar reserve, which stood at $4 billion as of Sunday, while another $28.9 million funded STRC repurchases and $11.7 million was added to Strategy’s cash balance.

Strategy founder and chairman Michael Saylor said in a Monday X post that the company repurchased $81.2 million worth of STRC stock and extended its US dollar runway by 57 days to 2.3 years.

Strategy’s perpetual preferred stock, STRC, traded at $89.40, or 10.6% below its $100 target value, during Monday’s pre-market trading, Yahoo Finance data shows. The company’s MSTR stock also declined 0.9% in pre-market trading on Monday.

STRC stock price, 1-day chart. Source: Yahoo Finance

STRC is one of Strategy’s financing mechanisms for Bitcoin purchases. Trading below its intended par can limit Strategy’s ability to raise funds through STRC sales. It may also pressure the company to further increase its dividend rate to attract buyers and support STRC’s price.

Related: CLARITY Act failure could send crypto valuations lower: Bernstein

On June 24, CryptoQuant CEO Ki Young Ju said Strategy should pause Bitcoin purchases and replenish its cash reserve, after the company’s dividend coverage fell to 14 months from seven years.

“They should pause Bitcoin purchases, rebuild cash reserves, and adopt a systematic framework for purchase timing,” Ju said in a June 24 X post.

In an 8-K filing dated June 29, Strategy unveiled a capital framework allowing Bitcoin sales to fund dividends, raised the annual dividend rate on its STRC preferred stock to 12%, and disclosed that its US dollar reserve had grown to $2.55 billion.  

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