Strategy CEO Buys $1M of STRC Stock as Preferred Shares Fall Below $100 Par Value

TLDR

• Strategy CEO Phong Le bought $1 million of STRC preferred stock personally, saying he’ll hold until it hits $100 par value
• STRC had dropped as low as $82.53, pushing its effective yield to 14%, before bouncing after Le’s announcement
• Strategy bought 520 Bitcoin last week for $34.9 million, bringing total holdings to 847,363 BTC
• The company’s USD reserve rose to $1.4 billion, up $300 million, to cover dividends and debt
• Analyst Mark Palmer says STRC’s decline makes funding less efficient but doesn’t mean Strategy’s model is broken

Strategy CEO Phong Le bought $1 million of the company’s own STRC preferred stock on Monday, posting on X that he plans to hold it “until it reaches par, likely longer.” The stock had fallen as low as $82.53 recently, well below its $100 target price.

After Le’s announcement, STRC bounced 1.46% to $89.88.

Why STRC Matters to Strategy

STRC is Strategy’s main tool for raising money to buy Bitcoin. When the stock trades at or above $100, the company can issue new shares and use the proceeds to buy more Bitcoin.

Strategy Inc, MSTR

With STRC below $100, that funding channel is effectively paused.

The drop pushed STRC’s effective yield to 14%, a level analysts compare to risky junk debt. Strategy had issued more than $10 billion of the stock in under a year and raised the dividend coupon seven times to 11.5%.

The combined dividend burden across all of Strategy’s preferred shares puts pressure on a company whose core software business generates little revenue.

Strategy Buys Bitcoin, Sells Stock

Despite the STRC pressure, Strategy did buy Bitcoin last week. It acquired 520 BTC for an average of $67,068 each, totaling $34.9 million. That brings its total Bitcoin holdings to 847,363 coins, bought at an average price of around $75,651.

This came after Strategy made its first Bitcoin sale in years at the end of May, selling 32 BTC for about $2.5 million to help cover STRC dividend obligations.

At the same time, the company sold 2.71 million shares of common stock last week, raising $335.5 million.

Strategy also announced its USD cash reserve has grown to $1.4 billion, up $300 million. The company says this reserve is meant to protect the quality of its preferred securities and cover future dividend and debt payments.

Strategy still has $25.4 billion in total stock available to sell under its existing offering program.

Benchmark analyst Mark Palmer pushed back on what he called “alarmist commentary” around STRC’s decline. He said there is a clear difference between the funding engine becoming less efficient and the overall model being broken.

Strategy shares fell 2.6% on Monday while STRC gained 1.1% on the day.

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