MicroStrategy Buys Just 334 Bitcoin, Spends 6x More on Buybacks: What Changed?

Source Beincrypto

MicroStrategy, now called Strategy, bought just 334 Bitcoin (BTC) for $28.7 million last week. Over the same week, it spent $176.3 million buying back its own preferred stock, about six times more.

The purchase lifts holdings to exactly 848,000 BTC, according to a Monday filing with the US Securities and Exchange Commission (SEC). It is a third straight weekly buy, yet only a fifth the size of the prior week’s 1,665 BTC.

Why Is Strategy Buying Back Stock Instead of Bitcoin?

The filing shows Strategy repurchased about 1.77 million shares of Stretch (STRC). That is a preferred stock that pays investors a 12% annual dividend.

Most of the money came from USD Cash, a pool of dollars the company keeps for general use. MicroStrategy drew $154.1 million from it for buybacks and only $13 million for Bitcoin.

The remaining $15.7 million for Bitcoin came from selling 92,894 new MSTR common shares.

Last week, Strategy said it would keep STRC’s 12% rate until the stock trades steadily near its $100 issue price.

Meanwhile, gold advocate Peter Schiff argued over the weekend that Strategy has lost its Bitcoin-buying power because STRC no longer raises fresh money.

“There’s no way that he’s going to be able to start selling more Stretch; that means he’s not going to be able to raise money to really start buying more Bitcoin,” Schiff said.

MicroStrategy Books a $20.9 Billion Bitcoin Gain for the Quarter

The same filing estimates MicroStrategy booked a $20.91 billion gain on its Bitcoin in the third quarter.

At the end of June, its Bitcoin was worth less than it paid. The rebound let Strategy reverse a $4.12 billion tax asset tied to that earlier loss.

At the current Bitcoin price of about $86,138, its stash is worth roughly $72.4 billion. Strategy paid $63.97 billion in total, or $75,441 per coin.

The company also holds a $4.88 billion USD Reserve for dividends and interest, plus $833.4 million in USD Cash.

Shareholders vote on October 28 on a plan to pay daily dividends across its four preferred stocks. The vote arrives as more of Strategy’s cash goes to those shares than to new Bitcoin.

Strive Buys 2,000 Bitcoin, Six Times Strategy’s Weekly Haul

Smaller rival Strive (ASST) disclosed a bigger purchase the same morning. It bought 2,000 BTC between September 28 and October 2 at an average of $84,422 each, according to its filing.

That comes to about $169 million and lifts its holdings to 29,462 BTC. Chief Executive Matt Cole said 61.5% of the money raised came from SATA, Strive’s own preferred stock.

The filing also shows Strive holds 505,000 STRC shares worth $50.2 million. Those are the same preferred shares Strategy is now buying back. Michael Saylor has said he wants his Bitcoin rival Strive to succeed.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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