What to know:
- Strategy Reserve dropped to 842,138 BTC after the company sold 1,638 BTC for $104.7 million during the week ending Aug. 2.
- Sale proceeds were split between preferred share dividends ($52.4M) and STRC share buybacks ($52.3M) under Strategy’s capital plan.
- Since adopting its new framework, Strategy has sold nearly $321 million in Bitcoin, while growing its cash reserves to support future obligations.
Strategy reserve is lower once again following Strategy’s sale of 1,638 BTC valued at $104.7 million in the week ending August 2, as reported by a new SEC Form 8-K filing. The latest sale has seen the firm’s Strategy reserve lowered to 842,138 BTC from 843,775 BTC, which has been the firm’s position in its Strategy reserve since early July. The sales were made at an average price of $63,957 per coin.
Strategy Reserve Supports Dividends and Share Buyback
According to the firm, it allocated the revenue from the sale of bitcoin equally to the payment of dividends and share repurchase. They allocated $52.4 million to paying dividends of their preferred shares and an additional $52.3 million towards the repurchase of STRC shares.
Strategy purchased 912,143 STRC shares worth $81.2 million during the week. They still had $28.9 million left to purchase the shares from common stock sales.
This marks the second repurchase by the corporation under the $1 billion share repurchasing program that was unveiled on June 29. After having executed another $25 million repurchase deal, Strategy now has about $893.8 million left under the approval.
Post-execution of the transaction, the total cost of buying Bitcoin by the corporation now amounts to $63.51 billion with an average of $75,419 per BTC.
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Strategy Reserve Sales Continue Under New Capital Framework
The most recent Bitcoin sale is part of the company’s capital structure that came into existence in June and enables Strategy to sell up to $1.25 billion worth of Bitcoin, depending on financial circumstances.
Strategy abandoned its traditionally held stance of “never selling” in late May when it sold 32 BTC to cover the dividends of preferred stock. This was its first-ever Bitcoin sale after December 2022, when it sold 704 BTC for taxes and bought 810 BTC two days after.
Since adopting the structure, the company has sold almost $321 million worth of Bitcoin, with $216 million being sold in July and the most recent $104.7 million Bitcoin sale.
Cash Reserve Grows While Bitcoin Holdings Decline
Strategy has not made any purchases of Bitcoin since June, but rather has concentrated on growing its USD cash balance to satisfy its yearly requirement for paying preferred dividends of around $1.76 billion.
Additionally, last week, Strategy liquidated 3,011,361 MSTR shares, bringing in $290.6 million, of which $250 million was used to increase its cash balance to approximately $4 billion.
As per Strategy, such financial maneuvers increased its average financing time, also called USD duration, to 2.3 years, while reducing its credit spread in respect of STRC preferred stock. It was further mentioned by the company that it will continue paying the 12% annual dividend on STRC stocks, i.e., $0.50 per share.
Following the last transaction, the Strategy reserve lags behind the all-time high of 847,363 BTC attained in June by 5,225 BTC, a fall of roughly 0.6%. Bitcoin is trading at $63,779 at the time of writing, but predictions have downgraded the probability of Strategy expanding its reserve to over 1 million BTC by 2027.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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