Key Highlights

  • Strategy bought 950 BTC between Sept. 14 and 20 at about $79,670 each and now holds about 846,000 BTC at a $75,416 average cost.
  • It repurchased 1.77 million STRC Preferred Shares for $174.0 million, sold no stock via its ATM, and ended with a $5.04 billion USD Reserve.
  • In August the company sold 1,690 BTC and 6.59 million MSTR shares; Q2 brought an $8.22 billion net loss on bitcoin's decline.
  • MSTR shares rose about 8% on the news, closing at $167.33 on Sept. 22, up about 29% over five sessions but still around 50% lower than a year earlier.

Strategy Inc's (NASDAQ:MSTR) latest Bitcoin purchase is small by the company's standards. What it signals matters more. According to its weekly update filed on Sept. 21, the company formerly known as MicroStrategy bought 950 bitcoin between Sept. 14 and Sept. 20 for about $75.7 million, an average of $79,670 per coin. That is roughly 0.1% of its holdings. The more notable details are how the purchase was funded and what came alongside it. Strategy sold no shares through its at-the-market (ATM) program that week. It also spent $174.0 million buying back its own STRC preferred stock.

Taken together, the update suggests Strategy has moved from defense back to accumulation, while putting a priority on supporting its preferred securities. Only six weeks earlier, it had sold bitcoin to fund similar buybacks. The market responded strongly. MSTR shares rose about 8% on Sept. 21. The stock closed at $167.33 on Sept. 22, up about 29% over five sessions but still around 50% lower than a year earlier.

The Sept. 21 Filing in Detail

As of Sept. 20, Strategy held about 846,000 bitcoin, bought for an aggregate $63.80 billion, or an average of $75,416 per coin including fees. During the week the company repurchased 1,771,238 shares of STRC, its variable-rate Series A Perpetual Stretch Preferred Stock. It did not buy back any STRF, STRK or STRD preferred shares or any MSTR common stock.

Strategy said $875.1 million remains available under its preferred repurchase program and $1.0 billion under its common stock program. It used $57.4 million from its USD Reserve to pay preferred dividends and Debt interest during the week, leaving the reserve at $5.04 billion, with a separate USD Cash balance of $1.05 billion. The bitcoin purchase itself was funded without new Equity issuance, a point several market commentators highlighted.

From Seller to Buyer in Six Weeks

The contrast with August is sharp. According to a filing on Aug. 10, Strategy sold 1,690 bitcoin for $108.6 million, used those proceeds to repurchase 1,152,020 STRC shares, and raised a further $653.1 million by selling 6.59 million MSTR shares. That left holdings at 840,447 bitcoin and the USD Reserve at $4.65 billion.

The shift tracks the bitcoin price. The August sales came when bitcoin traded in the mid-$60,000s. By early Sept. 23, bitcoin traded at about $86,000. At that level, Strategy's roughly 846,000 coins would be worth about $73 billion, or about $9 billion more than their aggregate cost. That is an illustrative calculation that will change with the market.

Second-Quarter Results Showed the Cost of the Drawdown

The company's July 30 results show how bitcoin's earlier slide hit reported Earnings under fair-value accounting. Strategy posted a second-quarter operating loss of $8.33 billion, including an $8.32 billion unrealized loss on its digital assets, compared with $14.03 billion of Operating Income a year earlier. The net loss was $8.22 billion, or $24.45 per diluted share, and the loss attributable to common stockholders was $8.62 billion after $400.7 million of preferred dividends. Revenue from the legacy software Business was $122.4 million, up from $114.5 million.

CEO Phong Le said the company reduced its convertible debt by 18% to $6.7 billion during the quarter. He also said Strategy wants STRC to trade over time at $99 to $100 and intends to buy back STRC shares in a regular and disciplined way when it trades below $100. That explains September's buyback. Executive Chairman Michael Saylor said the plan is to return STRC to health, with stable Demand and trading near par, as the company works to establish what it calls Digital Credit as an asset class.

The results also set out the company's Liquidity cushion. Le said on July 30 that the USD Reserve then stood at $3.75 billion, enough to cover existing preferred dividends and interest for more than 2.1 years, and that Strategy had paid dividends for 18 consecutive months without a miss. The reserve has grown since then, reaching the $5.04 billion reported on Sept. 20. CFO Andrew Kang introduced new metrics, including a "BTC Hurdle ARR" of 10.8%, which the company describes as its current effective cost of credit. By the company's framing, bitcoin needs to appreciate faster than that rate for its per-share bitcoin metrics to benefit.

Where Strategy Sits Among Bitcoin Proxies

Strategy remains the largest corporate holder of bitcoin. It competes for investor Capital with spot bitcoin Exchange-traded funds and a growing group of listed treasury companies. Its model differs from an ETF's because it uses Leverage through convertible notes and several series of perpetual preferred stock. That can amplify returns in rising markets and losses in falling ones. Its five-year Beta of about 3.6 sits well above that of a typical Nasdaq-100 member.

Key Risks Investors Weigh

  • Bitcoin price exposure: Earnings and Book Value move directly with bitcoin under fair-value accounting, as the $8.3 billion second-quarter unrealized loss showed.
  • Fixed obligations: Preferred dividends ran at about $400 million in the second quarter. The company says its USD Reserve covers these obligations for a long period, but the reserve is finite.
  • Dilution: Strategy has repeatedly sold common stock through its ATM program, including $653.1 million in early August, and it may do so again.
  • Preferred market stress: If STRC stays below par, the company may keep using cash, or in some cases bitcoin sales, to support it, which diverts resources from accumulation.
  • Sentiment swings: The stock trades well below its 52-week high of $365.21 and has shown sharp moves in both directions.

What Monday's Filings Will Show Next

Strategy typically files its bitcoin and capital-markets updates on Mondays. Coming filings will show whether the buying continues, whether ATM issuance resumes, and how much cash goes to STRC repurchases. The bitcoin price at the Sept. 30 quarter-end will largely determine third-quarter reported earnings. Those results are estimated to arrive around Oct. 29, pending a company announcement. Investors will also watch the STRC price against the company's $99 to $100 target and the balance of the USD Reserve, which stood at $5.04 billion as of Sept. 20.