Michael Saylor: Strategy Could Sell Bitcoin to Finance STRC Buybacks

Strategy Inc. may use future bitcoin sales to help fund repurchases of its preferred stock STRC, extending a playbook it has already used to support disciplined buybacks and encourage steadier trading in the security. In a July 27 post on X, Executive Chairman Michael Saylor said the company could finance STRC repurchases through either sales of MSTR common stock or sales of bitcoin, depending on market conditions. STRC refers to Strategy's Variable Rate Series A Perpetual Stretch Preferred Stock, which has a $100 stated amount and a dividend rate reviewed by management each month. Saylor said bitcoin sales could be particularly attractive when STRC trades meaningfully below its $100 stated amount, enabling Strategy to retire preferred shares at a discount. He added that the company wants STRC to trade close to $100 with strong liquidity, lower volatility, and sustainable independent demand. Under its digital credit capital framework, Strategy does not plan to issue additional STRC below $100. The company is already acting on that approach. For the week ended July 26, Strategy repurchased 288,930 STRC shares for about $25 million at an average price of $86.52 per share, according to a July 27 announcement. Saylor characterized Strategy as a consistent buyer when STRC is below $100, stepping up purchases at deeper discounts and slowing the pace as the price moves back toward the stated amount. Strategy still has $975 million remaining under its preferred securities repurchase authorization. At the latest average purchase price, the company bought each STRC share $13.48 below stated value, before factoring in potential savings from lower future dividend payments. President and CEO Phong Le said repurchases below $100 represent an attractive use of capital because they reduce future preferred dividend requirements at a discount. He said purchases will be scaled based on price and liquidity, with heavier buying at larger discounts and lighter buying as STRC approaches $100, while allowing independent market demand to help build a healthy and sustainable market. The STRC terms and dividend policy currently reflect a 12% annualized dividend rate, with the factors reviewed during monthly evaluations. Separately, Strategy increased its USD Reserve by $525 million through sales of MSTR common stock, lifting the balance to a record $3.75 billion. The reserve is designed to cover roughly 25 months of expected preferred dividend payments and, under a board-approved policy, is reserved for preferred dividends and debt obligations. Because that reserve is ring-fenced, STRC repurchases will need to be financed elsewhere. Strategy's primary funding options for buybacks are additional MSTR issuance and, as Saylor outlined, bitcoin sales when management believes market pricing makes the economics compelling.