MicroStrategy reported no bitcoin purchases or sales during the week of October 19 through 25, maintaining its position as the largest corporate holder of bitcoin with 848,517 BTC acquired for $64.02 billion at an average price of $75,446 per coin.
The company redirected capital toward repurchasing $204.9 million of STRC preferred stock while maintaining a $4.83 billion cash reserve, according to a company release.
Shift in Strategy
MicroStrategy has historically built its bitcoin treasury through stock sales and convertible debt offerings, using the proceeds to acquire coins. However, the company has shifted its approach this year, pausing bitcoin purchases multiple times to fund preferred share buybacks.
In September alone, the company repurchased $176 million of STRC preferred stock in a single week and expanded its digital credit securities repurchase program from $1 billion to $2 billion.
Preferred Stock Mechanics
STRC is a preferred stock with a variable dividend designed to trade near its $100 face value. When shares trade below par, as they have during recent market volatility, buybacks reduce the preferred claim while lifting net bitcoin per share. The company's recent repurchase of $100 in stated value for $86.52 exemplifies this strategy.
Financial Position
With bitcoin trading near $80,000 in late October, MicroStrategy's holdings showed a paper gain of approximately $3.9 billion. The $4.83 billion cash reserve is earmarked for preferred dividends and debt interest obligations.
The company has provided no timeline for resuming bitcoin acquisitions, with its buyback capacity dependent on preferred stock trading below par value and common stock sales.
