No Bitcoin Purchased This Week: Strategy Prioritizes Its STRC Shares

A week without Bitcoin purchases. Strategy has halted its weekly acquisition streak between October 19 and 25, for the first time since mid-September. The company allocated $204.9 million to buy back its preferred shares STRC, without selling any securities through its market issuance program. Its holdings remain at 848,517 BTC, while its overall cash reserves decrease.

Key Points

• Strategy holds 848,517 BTC, acquired for $64.02 billion, averaging $75,446 per bitcoin.
• The company repurchased 2,068,459 STRC shares for $204.9 million.
• Its overall cash reserves drop to $242.4 million, but its reserve dedicated to dividends and interest remains at $4.83 billion.
• The risk of exclusion from MSCI indices persists, with a definitive list expected on November 11.

Strategy Repurchases Its STRC Shares While Keeping Its Bitcoins Unchanged

Bitcoin purchases had already slowed down. Strategy had acquired 267 BTC for $22.1 million the previous week, after 250 BTC for $21.5 million. This time, the company made no acquisitions and did not raise any funds through its << at-the-market >> program, which allows for the gradual sale of shares on the market.

In contrast, STRC buybacks are increasing: $204.9 million, compared to $193.1 million and then $192.4 million in the previous two weeks. These preferred shares pay a variable dividend. Reducing their circulating number can therefore decrease future distributions and support their price, at the cost of immediate expenditure.

Strategy fully financed the operation with its << USD Cash >>, the cash intended for general uses, including Bitcoin purchases. Its balance thus decreases from $447.3 million to $242.4 million, a drop corresponding to the amount of the buyback.

The separate pocket, called << USD Reserve >>, remains stable at $4.83 billion. It is used to cover dividends of the preferred shares and interest on debt.

After the operation, Strategy still has a buyback authorization of $956.8 million for its preferred shares, as well as one billion for its ordinary MSTR shares. These amounts represent authorized ceilings, not additional cash available in its accounts. Strategy and Michael Saylor Pause Bitcoin Purchases -- Source: X Account JDC

MSCI Adds Uncertainty to Demand for MSTR Stock

This reallocation comes as Strategy risks being excluded from MSCI stock indices. The provider adopted new criteria on October 15 to identify companies whose financial profile resembles more of an investment vehicle than an operational business.

The method relies on several financial filters. The massive holding of bitcoins does not, by itself, define the rule. The changes will take effect at the close of November 30.

The definitive list of affected companies is expected on November 11. An exclusion of Strategy would lead to adjustments among funds replicating the affected indices, with a risk of MSTR stock sales. However, it would not directly force the company to sell its bitcoins.

Nothing automatically attributes the pause in purchases to this issue. The published operations mainly show a priority given, this week, to the buyback of preferred shares.

Strategy thus retains the entirety of its declared treasury, but with a reduced overall cash reserve. The continuation of buybacks or the resumption of BTC acquisitions depends on its resources and financing choices: the authorized envelope is not sufficient to measure its spending capacity.

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