Strategy buys 1,036 bitcoin but spends more than twice that on STRC

Strategy bought 1,036 bitcoin for $81.9 million between Nov. 2 and Nov. 8, lifting its holdings to 850,364 BTC, according to a Form 8-K filed on Nov. 9. In the same week it spent $188.3 million buying back 1,887,464 shares of STRC, its variable-rate preferred stock.

Both purchases came out of one pot. Strategy sold 2,051,348 shares of its MSTR common stock through its at-the-market program for $283.8 million in net proceeds and sold no preferred stock of any series. About two-thirds of that money went to the STRC buyback, roughly 29% to bitcoin, and the remaining $13.6 million to the company's USD Cash balance.

The new coins cost an average of $79,012 each including fees, above the $75,456 average for the whole stack, which cost $64.16 billion. At $74,815 per bitcoin, the CoinGecko price at 08:00 UTC on Nov. 10, the holdings are worth about $63.6 billion, slightly below what Strategy paid for them.

Buybacks have outweighed bitcoin since early October

This was not a one-off. In each of the five weekly reports covering Oct. 5 to Nov. 8, Strategy spent more on STRC than on bitcoin: $986.9 million on buybacks against $191.0 million for 2,364 BTC, by our tally of the filings. In the week to Oct. 25 it bought no bitcoin at all.

What changed this week is the funding. In the two previous weeks Strategy paid for STRC from USD Cash, which dropped from $640.5 million on Oct. 11 to $132.7 million on Nov. 1. This time new common shares covered the whole buyback, and USD Cash rose to $146.2 million. The separate USD Reserve, set aside for preferred dividends and interest, slipped to $4.77 billion after $21.1 million in dividend payments.

Why Strategy keeps retiring STRC

Strategy's latest quarterly report says it wants STRC to trade near its $100 stated amount, in a range of roughly $99 to $100, and lists repurchases among the tools for getting it there. STRC pays a 12% annual dividend, so retiring 1.89 million shares removes about $22.6 million a year in dividend obligations, by our calculation on the stated amount.

The cost lands on common shareholders. Every MSTR share sold to fund a buyback adds to the share count without adding bitcoin. Other listed holders have chosen different paths this year, from MARA's policy shift that opened the door to selling coins to Metaplanet's capital raise toward a 210,000 BTC target.

The bitcoin Strategy did buy was small next to the week's selling. US spot bitcoin ETFs posted $1.28 billion in net outflows, the most since late June, and bitcoin closed the week below its 50-week moving average before long liquidations topped $1 billion in 24 hours, The Block reported. That followed the Nasdaq-led drop on Nov. 6, when bitcoin lost about 6%.

Strategy's $81.9 million in bitcoin equals about 6% of those ETF outflows. Its preferred buyback program, which Strategy said on Oct. 19 had been raised to $3 billion, now has $560.3 million left, down from $748.6 million a week earlier.