Strategy Resumes Bitcoin Buying After Nearly Two Months

Michael Saylor’s company has just resumed its bitcoin acquisitions, but at a price that raises questions. Strategy has just bought 4603 BTC at 80318 each for 369.7 million dollars after about two months of absence. However, the company had sold several thousand bitcoins a few weeks earlier at a significantly lower price. Thus, this market return is not a simple resumption of accumulation, but it provides insight into the financial arrangements that now mark this group’s bitcoin strategy, between capital raises, liquidity management, and share buybacks.

A first bitcoin purchase in nearly two months

While the group’s chairman had revived speculation, Strategy bought 4630 BTC between August 24 and 30. This transaction brings its reserves to 845,050 BTC, acquired for a total sum of 63.73 billion dollars, which is an average cost of 75,412 dollars per BTC. Michael Saylor summarizes this scenario:

Strategy acquired 4603 BTC for 370 million dollars, increased its USD cash by 29 million dollars, and repurchased 152 million dollars of STRC shares. As of August 30, we hold 845,050 bitcoins and 6.71 billion dollars in USD assets, which brings our net leverage to 0.0%. $MSTR.

To finance its operations, Strategy sold 4,531,421 MSTR shares through its ATM (At The Market) program. The company then raised 602.8 million dollars net of fees. Not all of these funds were converted into bitcoins. Indeed, some were dedicated to STRC and others to the USD cash reserves.

The 602.8 million dollars raised were allocated among four uses :

• 369.7 million dollars for the purchase of 4603 BTC ;
• 151.8 million dollars for the repurchase of STRC shares ;
• 50.7 million dollars for STRC dividends ;
• 30 million dollars transferred to the USD Cash account.

Bitcoins repurchased at significantly higher prices than they were sold

The developments of recent months provide another reading of the acquisition. Strategy had sold 6948 BTC between May and August for nearly 432.5 million dollars, at a price close to 62,250 dollars each. The company is now back on the market at an average of 80,318 dollars per BTC, nearly 29% higher than its previous sale prices. After this sequence of sales and purchases, Strategy has 2345 BTC less than before the start of the sequence and keeps about 63 million dollars difference in cash.

The BTC sales responded to a financing need. STRC had fallen below its nominal value of 100 dollars in June, closing a financing channel formerly used to acquire bitcoin. Michael Saylor’s company then implemented its “Digital Credit Capital Framework”. This program authorizes up to 1.25 billion dollars of BTC sales to cover dividends and repurchase preferred shares at a discount. The current return to acquisitions happens after a sufficient rise of MSTR so that issuing shares becomes the least costly financing option again.

Strategy restructures its financial balances around bitcoin

New operations on the company’s financial structure accompany this resumption of acquisitions. During the relevant week, Strategy repurchased 1,557,177 STRC shares for an amount of 151.8 million dollars. There are still 364.8 million dollars available on the one billion dollar digital credit repurchase authorization. A separate one billion dollar envelope, dedicated to MSTR repurchasing, remains fully unused.

The dollar balance sheet has also strengthened. On August 30, Strategy showed 5.10 billion dollars of USD Reserves and 1.61 billion dollars in unrestricted USD Cash, bringing its dollar assets to 6.71 billion. According to the group, this posture reduces its “net leverage” to 0.0%. These statistics place the new bitcoin acquisition within a strategy where BTC accumulation now coexists with liquidity management of various financial instruments of the company.

With 845,050 BTC in holdings, Strategy remains fully exposed to bitcoin. This return to acquisitions shows that accumulation continues if its financing conditions allow it. The recent scenario also reveals a less linear reality. Thus, the company can sell BTC, consolidate its dollar reserves, act on its shares, then return to bitcoin at a higher price. The continuation of this policy may therefore depend on the conditions under which Strategy raises new capital.