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Strategy has spent $635.2 million repurchasing its STRC perpetual preferred stock, yet the security continues to trade below its $100 par value despite recovering from a low near $71.
The company disclosed in its latest filing that it bought back another $151.8 million of STRC during the week ended Aug. 30, paying an average $97.48 per share. The purchase covered 1.56 million STRC shares and came as Strategy returned to Bitcoin buying after a roughly two-month pause, acquiring 4,603 BTC for $369.7 million at an average price of $80,318 per coin.
STRC Buybacks Reach $635 Million
Strategy introduced a $1 billion authorization for preferred stock repurchases in late June as part of its Digital Credit Capital Framework, which set aside another $1 billion for common stock buybacks and raised STRC's annual dividend rate to 12%. Since then, the company has steadily used the authorization as STRC recovered from its June lows.
The size of Strategy's weekly purchases has increased along with STRC's price. During the week ended July 26, the company repurchased $25 million of STRC while the preferred shares remained well below par. Strategy later sold 1,638 BTC for $104.7 million between July 27 and Aug. 2, directing part of its available capital toward preferred stock dividends and repurchases.
By the latest reporting week, Strategy was willing to pay an average $97.48 for STRC, less than $3 below its stated $100 par value. The company funded its latest transactions by selling 4.53 million MSTR shares through its at-the-market program for net proceeds of $602.8 million. Of that amount, $369.7 million funded the Bitcoin purchase, $151.8 million went toward STRC repurchases, $50.7 million was allocated to STRC dividends and $30 million was added to Strategy's USD Cash account.
STRC Remains Short of $100 Par Value
STRC has recovered considerably since falling below $75 in late June, but Strategy has yet to push the preferred stock back to $100 on a sustained basis. Chief Executive Phong Le said in July that Strategy planned to resume issuing STRC once the security returned to par, linking the recovery directly to the company's ability to use the preferred stock for future Bitcoin purchases.
"We'll continue to build that. And yeah, when Stretch gets back to par, we'll issue more. We'll buy more Bitcoin," Le said at the time. STRC had been trading near $87 when Le made the comments on July 16.
Institutional demand has remained significant despite STRC trading below par. By late July, the preferred stock had become the largest holding in three major U.S. preferred stock exchange-traded funds, which collectively held $756 million of STRC. Institutional holdings had increased 105%, while the retail ownership share fell from 78% to 71%.
Strive's SATA Offers Competitive Pressure
Competition from Strive's Variable Rate Series A Perpetual Preferred Stock, SATA, has provided investors with another Bitcoin treasury-linked income product carrying a higher annualized dividend rate. Strive has maintained SATA's dividend rate at 13% for September, compared with STRC's 12%. SATA pays cash dividends every business day, while STRC distributes dividends twice a month.
Strive began daily SATA distributions on June 16 after moving away from monthly payments. The company said the change made SATA the first U.S.-listed security to make cash dividend payments every business day. For September, Strive declared daily payments of $0.0516 per share across 21 business days, equivalent to $1.0836 for the full month and a 13% annualized rate.
SATA has remained close to its $100 par value for more than a week, allowing Strive to continue selling shares through its at-the-market program and directing proceeds toward Bitcoin purchases. The performance gap between the two companies has remained visible in their common shares. Strive's ASST has gained roughly 60% since the start of the year compared with a 15% decline for MSTR.
Strategy Resumes Bitcoin Purchases
Strategy's latest 4,603 BTC acquisition ended a roughly 10-week period without a net Bitcoin purchase and lifted its holdings to 845,050 BTC, worth approximately $65.9 billion at current prices. The company had spent much of the previous two months directing capital toward cash reserves, preferred stock obligations and STRC repurchases.
Its latest transaction returned Bitcoin purchases to the largest use of proceeds from its weekly MSTR issuance, with nearly $370 million of the $602.8 million raised through common stock sales going toward BTC. Strategy still had approximately $19.09 billion of MSTR shares available for issuance under its at-the-market program as of Aug. 30. You can read more about Strategy's return to Bitcoin buying and how Strive's competing Bitcoin treasury strategy is shaping the corporate BTC landscape.