No Bitcoin purchased this week: Strategy favors its STRC shares

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Bitcoin purchases had already slowed down. Strategy had acquired 267 BTC for $22.1 million the previous week, following 250 BTC for $21.5 million. This time, the company made no acquisitions and raised no funds through its “at-the-market” program, which allows shares to be gradually sold on the market.

On the other hand, STRC repurchases are increasing: 204.9 million dollars, compared to 193.1 million then 192.4 million during the two previous weeks. These preferred shares pay a variable rate dividend. Reducing their number in circulation can therefore reduce future distributions and support their price, at the cost of immediate expenditure.

Strategy fully financed the operation with its “USD Cash”, cash intended for general uses, including bitcoin purchases. Its balance thus drops from 447.3 to 242.4 million dollars, a drop corresponding to the amount of the buyout.

The separate pocket, called “USD Reserve”, remains stable at $4.83 billion. It is used to cover dividends from preferred shares and interest on debt.

After the transaction, Strategy still has a repurchase authorization of $956.8 million for its preferred securities, as well as $1 billion for its MSTR common shares. These amounts constitute authorized ceilings, not additional liquidity available in its accounts.

This reallocation comes at a time when Strategy risks exiting MSCI's equity indices. The provider adopted new criteria on October 15 to identify companies whose financial profile more closely resembles an investment vehicle than an operating business.

The method is based on several financial filters. The massive holding of bitcoins therefore does not constitute, in itself, the definition of the rule. The changes will take effect at the close of November 30.

The final list of companies concerned is expected on November 11. An exclusion from Strategy would lead to adjustments in the funds tracking the relevant indices, with a risk of sales of MSTR securities. However, it would not directly force the company to sell its bitcoins.

There is nothing to automatically assign the pause in purchases to this folder. The published operations above all show a priority given this week to the repurchase of preferential securities.

Strategy thus retains its entire declared cash position, but a smaller general cash position. The continuation of redemptions or the resumption of BTC acquisitions depends on its resources and its financing choices: the authorized envelope is not sufficient to measure its spending capacity.

An editorial article. Le Journal du Coin, the first French-speaking news media on cryptocurrency, Bitcoin, and blockchain protocols.

Machine-translated from French