Strategy Spent $188.3 Million on STRC Buybacks Last Week

By Daniel Okafor

Strategy spent $188.3 million repurchasing 1,887,464 shares of STRC from Nov. 2 through Nov. 8, according to the company’s Nov. 9 disclosure. It funded the purchases with $283.8 million in net proceeds from selling 2,051,348 MSTR common shares over the same period.

STRC is Strategy’s variable-rate perpetual preferred stock. The transaction links the company’s common-stock financing with its effort to support the preferred issue, making the program’s cash coverage and funding path central operating considerations.

Economist Peter Schiff called STRC “dead” on Nov. 9, challenging Strategy’s use of buybacks to support a security it wants trading near $100. Schiff also claimed the company was running out of cash.

What is the buyback designed to do?

Strategy has maintained a 12% annualized dividend rate on STRC’s $100 stated amount as it seeks to keep the shares trading near that level. Its board sets the rate and can change it, while dividend payments are not guaranteed.

In its third-quarter results, Strategy CEO Phong Le described the repurchase effort as a commitment to “returning STRC to health.” Strategy has also said it wants sustained demand from other investors, rather than relying solely on its own purchases.

The company may adjust the pace of repurchases as STRC approaches $100. Its policy also says it does not currently intend to issue new STRC shares below that level, limiting one potential source of additional preferred supply.

Does Strategy have enough liquidity?

As of Nov. 8, Strategy reported a $4.77 billion reserve intended for preferred dividends and debt interest, plus $146.2 million in cash for broader corporate purposes. The reserve is not designated for STRC repurchases.

Those balances do not establish how long the buyback program can continue. Strategy has not treated the preferred-dividend reserve as a dedicated source for buying back STRC, and the weekly purchases instead came from MSTR sale proceeds.

Strategy also had $560.3 million remaining under its preferred-stock repurchase authorization as of Nov. 8. That figure sets a limit on what the company may spend under the program; it is not a cash balance.

What do the latest purchases add?

The Nov. 2-8 transactions extended a program under which Strategy had spent about $2.04 billion repurchasing STRC through Oct. 25. The Oct. 25 total is an earlier figure and does not include the latest week’s $188.3 million in purchases.

Strategy’s capital-raising and capital-return actions are therefore running in parallel: it sells MSTR common shares and uses the proceeds to repurchase preferred shares. The next weekly disclosure will show whether it changes that pace as STRC approaches $100, while the board retains authority to reset the dividend rate.