Strategy did not purchase Bitcoin for a fifth consecutive week, marking its longest pause in two years. The firm instead sold 5,429,160 shares of MSTR common stock between July 20 and July 26, generating $544.5 million in net proceeds, and increased its USD cash reserve to $3.75 billion.
Bitcoin holdings remained unchanged during the five-week pause.
The total cost of the Bitcoin holdings was $63.69 billion, with an average purchase price of $75,476 per Bitcoin. Based on a Bitcoin price near $65,000, the holdings were worth over $55 billion, approximately $8.5 billion below the purchase price.
Strategy also repurchased 288,930 shares of its STRC preferred stock for $25 million, the first buyback of its own preferred stock under the $1 billion Digital Credit Securities Repurchase Program approved on June 29. The repurchase removed approximately $3.47 million of annual dividend requirements and resulted in about $3.895 million accretion to common shareholders.
The Bitcoin buying pause is Strategy's longest in two years. According to some sources, the pause is part of a new capital management framework that authorized selling up to $1.25 billion of Bitcoin to top up reserves, cover dividends, and fund repurchases. Strategy's cash reserve increased from $3.225 billion to $3.75 billion; the firm stated that this reserve will not be used to fund repurchases, describing the buyback plan as about balance-sheet strength rather than retreat.
Strategy debuted a new metric called 'net Bitcoin per share,' which strips out $22.2 billion of debt and preferred claims, and redefined its mNAV metric against net Bitcoin per share, fixing the accretion threshold at 1.0x. Under the new metric, the same share price that appeared to trade at a discount on the old gross mNAV now reads 1.02x, right at the line below which issuing stock to buy coins shrinks Bitcoin per share.
We're gonna need another color.
Michael Saylor argued that Bitcoin's growth depends on integration with traditional financial institutions, a stance that sparked criticism from some Bitcoin supporters who cited the Bitcoin white paper. In a separate post, Saylor wrote: 'rejecting Bitcoin's links to financial infrastructure would deny access to most potential users.' President and CEO Phong Le said that Strategy intends to remain a long-term Bitcoin buyer.
Strategy reports second-quarter earnings on Thursday. MSTR share price was up more than 2% in Monday's premarket activity and up nearly 7% on Monday at nearly $98 per share, though year-to-date it has dropped by nearly 40%. STRC was trading around $88.61–$88.90 in pre-market trading, up about 2%, after trading below its $100 par value since mid-May and notching record lows earlier this month.
Strategy has $22.98 billion of MSTR capacity remaining in its ATM program, $975 million remaining in the Digital Credit Securities Repurchase Program for preferred stock, and an untouched $1 billion authorization for common stock. On prediction market Myriad, users place a 12% chance on Strategy holding over 1,000,000 BTC by year-end. Strategy is the largest corporate holder of Bitcoin and started buying it in August 2020, spawning a long list of copycat firms.