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BTC Strategy bought 334 bitcoins last week and spent more than six times on buying back preferred stock
According to the latest disclosure, Strategy (formerly MicroStrategy) purchased 334 bitcoins last week and spent more than six times the amount purchased in bitcoins on buying back its own preferred stock. The document also disclosed that the company's digital asset revenue in the third quarter was US$20.91 billion.
data shows that the 334 bitcoins were purchased between October 1 and 4, at a total cost of US$28.7 million, with an average price of US$85,838.80 per coin. This increase brought Strategy's total Bitcoin holdings to 848,000, a record high. The previous week came after the company exceeded its record high set in June. In the last three days of September, the company did not make any buying operations.
In contrast, Strategy bought back 1,033,168 shares of Stretch (STRC) preferred shares at the end of September for US$102.6 million, and subsequently repurchased 740,634 shares for US$73.7 million in the first four days of October, bringing total repurchase expenses to US$176.3 million. Of this,$154.1 million came from its U.S. dollar cash balance and $22.2 million came from interest income generated from cash and short-term investments. Currently, there is still $547.2 million available for its preferred stock repurchase program.
In addition, Strategy sold 92,894 shares of MSTR common stock through the mark-to-market issuance process, with a net proceeds of US$15.7 million all used to purchase Bitcoin, and an additional US$13 million was transferred from the US dollar cash account. During the above two time periods, the company did not utilize any of the four preferred stock financing lines.
Currently, the company's US dollar funds are divided into two parts: one is a "US dollar reserve" of US$4.88 billion, which is specifically used to pay dividends on preferred shares and interest on debt; and the other is a "US dollar cash" of US$833.4 million, which is used for daily purposes, including purchasing Bitcoin. During the week ended October 4, the company drew $142.5 million from reserves to pay dividends and interest.
Earnings for the quarter, which reached US$20.91 billion, were the largest recorded in the document. Since Strategy uses fair value measurement for Bitcoin, the $20.91 billion reflects the price appreciation for the entire quarter and includes $1.88 billion in deferred income tax charges. As of now, the average cost of the company's overall Bitcoin holdings is US$75,440.70, and the cost of Bitcoin purchased last week is nearly 14% higher than this average cost.
Overall, the company is continuing to increase its holdings of Bitcoin on a smaller scale above its existing costs, while also investing a larger amount of money in preferred shares that have long been below the face value of $100.
This strategy is not unique to Strategy. Metaplanet, also a Bitcoin treasury company, sold 10,000 bitcoins in its third quarter and bought back another 11,000 bitcoins, completing a "round-trip transaction." The move aims to demonstrate to credit rating agencies their ability to convert bitcoin into cash on demand. Currently, both companies attach equal importance to credit management and asset accumulation on their balance sheets.
