In brief
- Strategy purchased $200 million worth of Bitcoin last week.
- The company issued STRC, but proceeds mostly came from common shares.
- Strategy raised STRC’s monthly dividend for a seventh time to 11.5%.
Strategy disclosed its third-largest Bitcoin purchase of the year on Monday, scooping up $200 million worth of the asset using proceeds that partially came from preferred shares.
The Tysons Corner, Virginia-based firm now owns roughly 720,750 Bitcoin, according to a press release, with its holdings currently worth about $49.5 billion. The company’s latest purchase comprised around 3,000 Bitcoin, bought for an average price of around $67,700 apiece.
The Bitcoin-buying firm has been nursing an unrealized loss on its holdings since the asset dipped below the $76,000 mark last month. With Bitcoin changing hands around $68,452 on Monday, according to CoinGecko, the company’s stockpile was down $5.3 billion on paper.
The company’s stock price jumped nearly 6% to about $137 on Monday, according to Yahoo Finance. Despite the increase, shares had still tumbled almost 60% over the past six months.
Last week, Strategy raised more money than it spent on Bitcoin, pocketing around $33 million as it doled out more of its variable rate, or STRC, preferred stock. In recent months, Strategy has embraced the dividend-paying product as an alternative source of funding, which co-founder and Executive Chairman Michael Saylor has dubbed “digital credit.”
Over the weekend, Strategy signaled on X that it was raising STRC’s monthly dividend to 11.5%. That represented the company’s seventh attempt to make the product more attractive, since it was introduced as a low-volatility, high-yield cash instrument in July.
Last week, the company raised $7.1 million via STRC, a small sum compared to the $230 million that gained from issuing common shares. By issuing preferred shares, Strategy seeks to keep Bitcoin routinely flowing to its coffers—without diluting common shareholders—as its stock faces pressure amid what some fear is a prolonged downturn for Bitcoin.
The company has so far issued $3.4 billion worth of STRC, anchored by a $2.5 billion IPO in July that was upsized due to high demand. Last month, Strategy raised $85.5 million by issuing STRC compared to $450 million raised from selling common shares.
Strategy has shored up billions of dollars in cash as a way to effectively pre-pay dividends, while some onlookers have scrutinized the firm’s ability to make the payments long-term. On Myriad, a prediction market owned by Decrypt parent company DASTAN, traders penciled in a 15% chance that Strategy sells Bitcoin this year, down from 28% a month ago.
When the company disclosed a fourth-quarter loss of $12.4 billion due to a massive swings in the value of its holdings last month, Saylor said in a statement that the company was strengthened by its “shift to digital credit, which aligns with our indefinite Bitcoin horizon”
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