MicroStrategy sells shares to purchase 520 Bitcoins! The CEO buys $1 million worth of STRC personally—and will get it at the normal price.

MicroStrategy sells stock to raise $355 million and adds 520 Bitcoins. Facing the decline of preferred stock STRC below par value, CEO purchases $1 million worth to stabilize market confidence.

Under selling pressure on STRC, MicroStrategy raises funds to buy more Bitcoin

Bitcoin whale MicroStrategy (Strategy) announced last night (6/22) that last week, by selling approximately 2.7 million common shares, it raised $335 million, of which $34.9 million was used to purchase 520 Bitcoins at an average price of $67,068; the remaining $300 million was held as cash reserves, bringing total reserves to $1.4 billion.

This is MicroStrategy’s third consecutive week of increasing Bitcoin purchases. MicroStrategy currently holds a total of 847,363 Bitcoins, with a total investment of about $64 billion, and an average purchase cost of $75,651 per Bitcoin.

Image source: MicroStrategy 8-K filing MicroStrategy sells common stock to raise funds to buy more Bitcoin

As Bitcoin’s recent price rebound approaches $65,000, MicroStrategy’s common stock also rose 3.5% in early U.S. trading on Monday.

To stabilize investor confidence, MicroStrategy CEO Phong Le posted after the announcement that, he has purchased $1 million worth of preferred stock STRC, and pledged to hold the stock until its price recovers to par value, or possibly hold longer.

Preferred stock STRC faces selling pressure, trading below par

Amid a sluggish Bitcoin trend, MicroStrategy’s Bitcoin assets are not only in unrealized losses, but the high-dividend preferred stock (special stock) STRC also faces selling pressure.

Because STRC currently generates up to $100 million in additional fixed costs for MicroStrategy each month, investors are concerned about the company’s ability to pay future dividends. With investor concerns about stability, STRC experienced a panic sell last Thursday, with its price plunging below $83, far below the $100 issuance face value.

MicroStrategy recently sold 32 Bitcoins again after many years, originally to demonstrate to the market that the company would do its best to pay dividends to preferred shareholders, but it also sparked speculation about whether it will continue to sell core assets.

The main purpose of MicroStrategy actively replenishing cash reserves to $1.4 billion is to ensure it can smoothly pay dividends on high-yield preferred stocks like STRC.

• **Related report:**MicroStrategy’s Price Reduction Strategy? Selling Bitcoin at a Low and Buying 1,550 More, STRC Approved for Semi-Monthly Dividends

STRC weakness sparks criticism and panic

The recent weakness of STRC has also triggered market fears that MicroStrategy’s funding model may fall into a death spiral. Besides criticism from Fortune magazine recently, on-chain analyst Axel Adler Jr. also said that MicroStrategy’s financing model is under pressure.

He pointed out that, with Bitcoin’s price below MicroStrategy’s average acquisition cost, and STRC falling below par value along with rising financing costs, the company’s ability to continue buying Bitcoin in the market may be weakened.

Gold bull Peter Schiff criticized that MicroStrategy is like selling stock worth $1.20 to buy $1 worth of Bitcoin, severely damaging the company’s value.

Taproot Wizards CEO Udi Wertheimer also warned that, if MicroStrategy attempts to liquidate its massive Bitcoin reserves, the market absorbing these supplies will greatly diminish the actual funds the company can recover.

**Related report:**Fortune: MicroStrategy’s Magic Is Gone and a “Death Spiral” Could Erupt, but Two Wall Street Firms Disagree

Benchmark: STRC weakness is just a post-dividend phenomenon

Despite market fears, some analysts remain relatively optimistic.

Benchmark-StoneX senior research analyst Mark Palmer pointed out that STRC’s weakness is purely a mechanical reaction after the ex-dividend date, with no signs of the company being in trouble. He expects MicroStrategy to raise its dividend in early July, which should help push the price back up to par.

CoinShares research director James Butterfill believes that, while MicroStrategy’s financing model has indeed become less efficient and investors demand higher risk premiums, it does not yet pose a survival crisis.

MicroStrategy Chairman Michael Saylor emphasized that the company’s Bitcoin assets worth $55 billion are enough to cover dividends and interest payments for the next 32 years, and pledged to continue replenishing cash reserves to maintain the creditworthiness of its digital securities.

Further reading:
MicroStrategy Saylor: I said “you” should never sell Bitcoin, not that the company wouldn’t sell coins

Bitcoin drops 22% in a month! MicroStrategy reassures investors: it’s just AI capital rotation, assets not devalued