Key Takeaways
- Strategy shares fell slightly today, as did Coinbase, after bitcoin slipped below $80,000 and Strategy said it bought no bitcoin last week.
- Strategy spent $204.9 million buying back its STRC preferred stock last week, and its USD Cash fell to $242.4 million from $447.3 million.
- Strategy’s funding engine is running in reverse for now, and its bitcoin buying is unlikely to restart until STRC trades back near its $100 stated amount.
- Third-quarter results come on Oct. 29, but the bigger test is MSCI’s Nov. 11 list of companies its new rule drops from its indexes.
Strategy (MSTR) is down slightly today after saying it bought no bitcoin last week.
Bitcoin slipped back below $80,000 over the weekend. Coinbase Global (COIN) is down 2%, while Riot Platforms (RIOT), MARA Holdings (MARA), and CleanSpark (CLSK) are al modestly up.
Thomas “Tom” Lee is chairman of Bitmine Immersion Technologies, the No. 2 crypto treasury company after Strategy. He said this morning: “Crypto got pulled down by the same ‘risk off’ forces behind the AI sell-off.”
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What exactly happened
Strategy’s 8-K, filed before the open, covered Oct. 19 to 25:
- No bitcoin bought. That ends a run of weekly purchases that began in mid-September.
- No shares sold through its at-the-market program.
- $204.9 million spent buying back its STRC preferred stock, up from $193.1 million the week before.
- All of it paid from USD Cash, the pool it uses to buy bitcoin.
The flywheel is running backwards
Strategy has long paid for its bitcoin by selling new stock. Its diluted share count nearly tripled from fiscal 2021 to fiscal 2025…
Last week, it sold none.
STRC was supposed to take over that funding. But it fell below its $100 stated amount in late May, and Strategy hasn’t sold any since. Now it’s buying STRC back. It lifted that buyback program to $3 billion a week ago, and $956.8 million is left.
That eats into a cash pile Strategy only built in fiscal 2025, when it reached $2.3 billion…
And last week alone, USD Cash fell to $242.4 million from $447.3 million. (The separate $4.83 billion USD Reserve, which covers preferred dividends and interest, held steady.)
Nov. 11 matters more than earnings
Third-quarter results come after the close on Oct. 29, the same evening as Coinbase’s. But Strategy has already said to expect a $20.91 billion gain on its bitcoin.
The bigger date is Nov. 11. That’s when MSCI names the companies its new rule drops from its indexes after the Nov. 30 close. Removal would force index funds to sell, and the stock fell nearly 10% in a day on MSCI’s decision.
My take: Strategy is spending its cash propping up STRC, and its bitcoin buying looks stuck until STRC trades back near $100. That’s part of why the stock is falling harder than bitcoin, and I don’t expect that to change before Nov. 11.
Of course, one new STRC sale at par would get the flywheel turning again.
So what is Strategy stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
