Strategy Drops $1.28 Billion on Bitcoin, Issues $377 Million in Preferred Shares

In brief

• Strategy notched its largest Bitcoin purchase in over a month.
• The firm issued STRC at its fastest rate since the product’s debut last July.
• The company’s Bitcoin stockpile showed a $5.5 billion loss on paper.

Strategy spent $1.28 billion on Bitcoin last week, notching its largest purchase in over a month with funds that partly stemmed from STRC, its variable rate preferred share. The Tysons Corner, Virginia-based firm now owns roughly 738,750 Bitcoin, according to a press release. With the digital asset changing hands around $68,500 on Monday, the Bitcoin-buying firm’s stockpile was worth $50.5 billion. Last week, Strategy raised $377 million by issuing STRC, a product that pays a variable monthly dividend—currently 11.5% on an annualized basis. Meanwhile, the firm doled out nearly $900 million worth of its common stock.

STRC’s price is meant to be anchored around $100, and when the preferred share trades above that threshold, Strategy has signaled that it will issue more STRC and use the proceeds to buy Bitcoin. So far, the company has issued $3.8 billion worth of the dividend-paying product. Strategy has leaned on STRC as an alternative funding source for months, but its latest announcement marks a milestone. The only other time that Strategy has disclosed issuing more STRC in one go was during the product’s $2.5 billion debut in July. “The second century begins,” Strategy co-founder and Executive Chairman Michael Saylor posted to X on Sunday. Last month, the company notched its 100th Bitcoin purchase since its journey toward becoming the largest corporate holder of the digital asset began in 2020.

The company’s stock price rose 2.8% to $137, according to Yahoo Finance. Although that was above last month’s low of $104, shares have still swooned 58% in six months. Since STRC’s introduction last year, the company has raised its dividend nine times, while positioning the product as a low-volatility, high-yield cash instrument. Strategy’s disclosure on Monday marks its second-largest Bitcoin purchase of the year, following its purchase of 22,300 Bitcoin in January. At the time, Strategy raised $294 million via STRC in tandem with $1.8 billion worth of the company’s common stock. The average purchase price for Bitcoin in Strategy’s coffers fell to around $75,800 with its most recent purchase. That meant the company was carrying an unrealized loss of around $5.5 billion on its holdings, funneling $56 billion into Bitcoin over time. Products like STRC are saddling Strategy with additional monthly costs, leading some analysts to describe the company’s creation of cash reserves last year as prudent. Still, the company’s approach has drawn notable scrutiny as its stock price has tumbled in recent months. On Monday, traders on Myriad penciled in a 14% chance that Strategy sells Bitcoin this year. Last month, traders on the prediction market platform owned by Decrypt parent company DASTAN foresaw as much as a 35% chance that that would happen.