🔥Strategy’s first time buying back preferred shares; for the 5th consecutive week it did not buy BTC

🔴 Strategy bought back 288,930 shares of STRC at a price range of ~$86.52 ($25M), purchased on the open market from 20-26/07. The purchase price was 13.5% lower than the $100 par value. Current situation:
- The current holdings remain 843,775 BTC (cost basis ~$75,476 = $63.69B)
- Market value ~$54.4B, unrealized loss ~$9.5B
- First capital withdrawal from program $1B approved on 29/06; remaining $975M
-> The last purchase was 520 BTC on 22/06. Marking Strategy’s longest BTC-buying pause streak in nearly 2 years.
🔴 The company’s USD reserve hit a record $3.75B
- Increased $525M from $3.225B, all from selling 5,429,160 MSTR shares via the ATM (~$544.5M net, ~$100.29 per share)
- Equivalent to ~25 months of preferred dividends, or ~2.1 years if including the interest on loans (~$1.76B/year)
- All four preferred ATM channels STRF/STRC/STRK/STRD are at $0
🔴 Cost of capital is the biggest issue right now:
- STRC raised the dividend to 12.00%/year starting 01/07; the step-up path is 9% when issuing in July 2025 -> 11.25% -> 11.5% -> 12%
- The company policy does not allow issuing STRC below $100, so the preferred funding channel is effectively closed
- The USD reserve fund is restricted from being used to buy back STRC; the money must come from selling MSTR or selling BTC
🔴 Previously, it was issuing shares to buy BTC. Now it’s issuing shares to raise cash and buy back its own debt. Buying STRC at $86.52 is the correct corporate governance decision: it removes an effective cost of capital of nearly 13.9% and captures a $13.48 per-share discount.
But the cash comes from diluting MSTR holders in a mNAV area around 1x. Common shareholders are giving up BTC per share to shrink a layer of capital they do not own. In scale terms, $25M versus the STRC stack of about $10.5B is only 0.24%—the move is taking a plate away, not addressing the underlying issue.