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BTC Strategy has significantly increased its holdings in preferred stock repurchases, with Bitcoin purchase spending only one-sixth of the former's.
Strategy (formerly known as MicroStrategy), a publicly traded business intelligence company known for its aggressive Bitcoin acquisition strategy, made significant adjustments in capital allocation last week, preferring to repurchase its preferred shares rather than continue to buy large quantities of Bitcoin.
Preferred stock repurchases far exceed Bitcoin purchases
According to a Form 8-K filing with the U.S. Securities and Exchange Commission (SEC), Strategy spent US$28.7 million to purchase 334 bitcoins between Monday and Sunday, bringing its total holdings to 848,000.
Meanwhile, Strategy spent US$176.3 million to repurchase approximately 1.77 million STRC preferred shares. The expenditure on preferred stock buybacks is more than six times its weekly Bitcoin purchase budget.
This large-scale repurchase aims to strengthen the role of preferred securities in the financing and management of the company's expanding Bitcoin treasury portfolio. The move shows that the company views preferred shares as a financial cornerstone that supports its cryptocurrency accumulation plan.
Comparison of key data
- Bitcoin purchase: Expenditure of US$28.7 million, purchase of 334 BTC
- Preferred share repurchase: Spending $176.3 million to repurchase 1.77 million STRC shares
Strategy, founded and led by Michael Saylor, has become one of the largest Bitcoin holders in the world.
Term analysis: Preferred Stock
Preferred stock is a type of stock owned by a company that has a fixed dividend and is better paid than common stock when assets are liquidated, but usually does not have voting rights.
Shareholders vote on daily dividend payment
In addition, Strategy has launched a plan to change dividend payments on its preferred shares from the current irregular frequency to daily payments. The company has filed a power of attorney seeking shareholder approval to make regular dividend payments on its STRC, STRF, STRK and STRD preferred shares every business day.
Under the proposal, dividend interest rates and total payment obligations remain unchanged. However, Strategy said daily payments will reduce reinvestment lag and improve liquidity and price stability for preferred shareholders.
If approved, STRC's new daily dividend schedule will be implemented in November, while dividends for STRF, STRK and STRD will be adjusted in January, subject to the adoption of the resolution at the special shareholders 'meeting scheduled for October 28.
This shift is designed to make preferred stocks more attractive to investors seeking more immediate returns and greater flexibility, factors that may help underpin the company's unique strategy in cryptocurrency treasury management.
