Strategy's STRC preferred stock closed at $99.88 on Monday, marking its best performance since May. The move comes as the company has shifted its capital allocation strategy, spending roughly seven times more on share repurchases than bitcoin purchases over the past two weeks.
From September 28 to October 11, Strategy repurchased $368.7 million worth of STRC while acquiring only 584 bitcoin. During the same period, STRC climbed from a June low of $71.25, with Strategy accounting for approximately 30% of trading volume.
The Original Commitment
On July 27, when STRC was trading in the $80s, Strategy's Michael Saylor outlined a buyback principle on X, stating: "We intend to remain a regular, disciplined buyer of STRC below $100. More at deeper discounts, less as STRC nears $100." That initial transaction involved 288,930 shares for $25 million at an average price of $86.52.
STRC is a variable-rate Series A perpetual preferred stock with a $100 par value that pays semi-monthly cash dividends and carries no maturity date.
The Buyback Breakdown
Strategy's filings reveal a pattern contrary to the stated rule:
- September 28-30: 1,033,168 shares for $102.6 million at approximately $99.31 per share, with no bitcoin purchases
- October 1-4: 740,634 shares for $73.7 million at about $99.51 per share, alongside 334 bitcoin for $28.7 million
- October 5-11: 1,932,145 shares for $192.4 million at approximately $99.58 per share, against 250 bitcoin for $21.5 million
The Dividend Incentive
Strategy's September 30 filing maintained STRC's dividend at 12% annually and stated management would recommend maintaining that rate "until STRC has demonstrated sustained, healthy trading near $100 per share." This $100 benchmark is integral to the dividend policy.
Retiring approximately 3.7 million shares through buybacks removes roughly $44.5 million in annual dividend obligations, as each share carries a $12 yearly dividend.
Remaining Capital
Strategy's preferred repurchase program had $354.8 million remaining as of October 11, down from $620.9 million on September 30. At the recent pace of spending, this represents less than two weeks of buyback capacity. The company cited $975 million available in July.
On bitcoin, Strategy's average acquisition cost stands at $75,444 per coin. The 250 coins purchased in the final week cost $86,194 each.
What Comes Next
Three upcoming dates will shape Strategy's path forward. October 15 marks the record date for STRC's $0.50 dividend payable October 31. October 28 brings a special stockholder meeting to vote on converting to daily dividends, which Strategy says would help STRC trade closer to $100. The company's next Monday filing will reveal whether buyback activity has moderated now that STRC trades near par value, as the July commitment suggested it would.
