Strategy indicates that there were no purchases or sales of Bitcoin during the week from October 19th to 25th. The company still holds 848,517 BTC, with the purchase cost of these Bitcoins amounting to 64.02 billion US dollars, and an average price of 75,446 US dollars per coin.
According to the company's disclosure, its cash was used to repurchase $204.9 million of STRC preferred stock, while the company maintained a cash reserve of $4.83 billion.
The company under Michael Saylor has built the world's largest corporate Bitcoin position by selling stocks and convertible debt, and used the proceeds to buy more Bitcoin. However, this strategy has changed this year. The company has paused its purchases several times and has redirected its funds towards repurchasing preferred stocks.
The company has experienced multiple periods of suspending purchases, including one week where they stopped buying Bitcoin, as well as a period after not buying for five consecutive weeks during which they turned to selling Bitcoin.
In September this year, the company repurchased $176 million of STRC within a week, and expanded its digital credit securities repurchase program from $1 billion to $2 billion.
Strategy Preferred Stock Dividends
STRC is a type of preferred stock with floating dividends, designed to trade close to its $100 par value. When the stock price falls below this level, as has occurred during recent market fluctuations, repurchasing these shares reduces the preferred stock's claim rights. By repurchasing shares with a par value of $100 for $86.52, the reduction in claim amount exceeds the actual cash paid, thereby increasing the net Bitcoin holdings per share.
On Monday, October 26th, Bitcoin hovered around the $80,000 level after falling below that mark. The selling pressure over the weekend pushed the price down to a low of $79,000, a level not seen in over a month.
The average cost of Strategy is $75,446 per coin, which is lower than the current price, resulting in a book floating profit of approximately $3.9 billion. The company disclosed that $4.83 billion in reserves can be used to pay preferred stock dividends and debt interest.
The repurchase capability of Strategy depends on the trading price of preferred stocks being below par value, as well as cash from the sale of common stocks; this year, however, this financing mix has shifted more towards stock sales.
The company has not yet provided a timeline for resuming purchases of Bitcoin.
