Strategy bought 811 BTC. STRC spent more than three times as much on share buybacks

Strategy bought 811 BTC for $65.5 million. and now has 849,327 BTC.

The sale of MSTR shares brought the company approximately USD 164 million. At the same time, the company spent USD 208.2 million. from cash to repurchase STRC preferred stock.

The dollar reserve together with cash decreased to approximately USD 4.92 billion. The announcement of changes in MSCI indices is scheduled for November 11.

Strategy returned to buying bitcoin after a week’s break, but it spent more than three times as much on repurchasing its own STRC shares than on the cryptocurrency. According to a report filed on November 2 with the SEC, in the week from October 26 to November 1, the company purchased 811 BTC for $65.5 million, an average of $80,846. A few days earlier, Strategy admitted in its quarterly report that it had sold bitcoins for approximately $432 million since the beginning of the year.

Where did Strategy get the money to buy BTC?

The company sold 1,178,552 ordinary shares of MSTR in an ATM program, i.e. a direct issue of shares on the market. In this way, it collected a net amount of USD 164 million. Less than half of this amount went to bitcoin, and the remaining $98.5 million. added cash to the company. At that time, the company did not sell preferred stock.

The repurchase of STRC cost $208.2 million

In the same week, Strategy repurchased 2,092,035 STRC preferred shares for $208.2 million. The entire amount was covered by cash. This is the second week of repurchases in a row: a week earlier, the company suspended bitcoin purchases and allocated $204.9 million to STRC. The program has $748.6 million left for further repurchases of preferred shares.

The dollar reserve, along with cash, has declined

In its October 29 quarterly report, Strategy reported its dollar reserve at $4.83 billion. and cash for USD 242.4 million, for a total of approximately USD 5.07 billion. As of November 1, it was USD 4.79 billion. reserves and USD 132.7 million cash, total approx. USD 4.92 billion. The company paid out $43.4 million from the reserve this week. dividends on preferred shares.

The proceeds from the MSTR issuance covered the purchase of bitcoin and part of the STRC repurchase. The company financed the rest from its existing cash.

What about the MSCI index review?

MSCI is expected to announce changes to the index composition on November 11 and implement them after the session on November 30. The possible removal of Strategy would mean the sale of its shares by funds tracking the appropriate indices.

However, there is no confirmation that the company’s current transactions are preparation for such a decision. Purchasing BTC or selling MSTR alone cannot determine how Strategy assesses foreclosure risk.

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What does this mean to you

Strategy is buying BTC again, but it obtained the money for this purchase from the sale of new shares. Such an issue reduces the share of existing shareholders in the company.

The average cost of all 849,327 BTC of the company is $75,451. At the exchange rate on November 2, the value of the portfolio was only about 3% higher. A further decline in the price may result in the company having bitcoins worth less than they paid for them. This would not yet mean a loss in sales.

What is not known yet

The company did not present a plan to finance further STRC repurchases. The list of changes to be announced by MSCI on November 11 will be important for assessing the risk associated with indices.