Strategy (NASDAQ: MSTR) reverted to its Bitcoin plan. It disclosed a $369.7 million buy in an SEC filing on Monday. This purchase turns out to be Strategy’s first one in the last two months. Michael Saylor’s company is the largest corporate Bitcoin owner, and its comeback from selling to buying might increase confidence among investors.
Strategy bought 4,603 Bitcoin between August 24 and 30 for an average of $80,318 per Bitcoin, as per the SEC filing. This brings Strategy’s total holdings to 845,050 Bitcoin. Strategy has already spent $63.73 billion in accumulating this stake in Bitcoin. Its average price per Bitcoin is $75,412.
Saylor confirmed the figures in an X post on August 31, saying that the company owns “845,050 bitcoin” and $6.71 billion in what they call “USD Assets” which consist of USD Reserve and USD Cash accounts. The net leverage of the company is 0.0%.
Strategy raises $603M from stock sales
The purchase was reportedly done without spending any extra money. As part of its ATM program, Strategy raised a net of $602.8 million through selling 4,531,421 shares of MSTR stock in one week.
$369.7 million was spent to purchase Bitcoin, $151.8 million was spent to purchase STRC preferred stock, $50.7 million was spent on dividend payments on preferred stock, while the remaining $30 million was spent on increasing the company’s USD Cash reserves.
The issuing of stocks to acquire Bitcoin has always been the way of funding the company’s operations. The company decided to restart the process only when the prices of its stocks recovered enough to be a more profitable way of acquiring capital compared to borrowing.
Strategy pays nearly 29% more to replace Bitcoin
That approach has turned out to be quite costly. From May to August, the company sold 6,948 BTC for around $432.5 million ($62,250 each). The repurchase at the price of $80,318 per coin implies that the company overpaid by almost 29%. The final result is that Strategy is down 2,345 BTC, but it managed to get around $63 million in the process.
The summer sales happened for certain reasons. When the share price of STRC fell below its par value of $100, a funding source of the company was closed off.
In order to continue with the process, the company has decided to launch the Digital Credit Capital Framework, under which it plans to sell Bitcoin up to $1.25 billion to pay dividends and repurchase its own preferred stock. At press time, Bitcoin costs $77,849.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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