Key Takeaways
- Strategy bought no bitcoin in the week to Oct. 25 and spent $204.9 million buying back its STRC preferred stock, with $5.1 billion in dollar assets on hand.
- For now, Strategy is putting its cash into its preferred stock and its dividends, and its bitcoin buying looks stalled until STRC trades back near its $100 stated amount.
- $4.83 billion of that cash is set aside for dividends and interest, and the business itself had negative free cash flow of $112 million in fiscal 2025.
- Third-quarter results come after the close on Thursday, Oct. 29, and need to show whether bitcoin per share is growing again and whether the pause is temporary.
Strategy (MSTR) has $5.1 billion in dollars, and last week it bought exactly zero bitcoin.
It spent $204.9 million buying back its own preferred stock. Executive Chairman Michael Saylor gave his reasoning in a post on X on Saturday: “Programmatic $STRC buybacks have helped strengthen our credit markets and support $MSTR.”
That might be true. But for a company built to turn capital into bitcoin, it’s a big change, and Thursday’s third-quarter report has to say whether it lasts.
What exactly happened
Strategy’s 8-K for Oct. 19 to 25, filed Monday, showed:
- No bitcoin bought or sold, and no stock sold through its at-the-market program.
- 2,068,459 STRC shares bought back for $204.9 million, at an average of $99.06 each, just under the $100 stated amount.
- 848,517 bitcoin held, bought for $64.02 billion, or $75,446 apiece on average.
- $4.83 billion in its USD Reserve and $242.4 million in USD Cash: the “$5.1B of USD Assets” Saylor posted.
The week before, Strategy spent $193.1 million on STRC and $22.1 million on bitcoin. So in two weeks that’s $398 million on its own preferred stock and $22 million on bitcoin.
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Most of that $5.1 billion is already spoken for
The USD Reserve exists to pay preferred dividends and interest. The buybacks come out of USD Cash, which fell to $242.4 million from $447.3 million in a single week. At last week’s pace, that’s roughly one more week of buybacks.
The reserve itself is a recent build. For years Strategy carried more than $2 billion of debt and almost no cash, and it only reached $2.3 billion of cash in fiscal 2025, against $8.25 billion of debt.
The bill it covers is big. Management put annual dividends and interest at $1.76 billion in July, and Strategy paid $400.7 million in preferred dividends in the second quarter alone. Saylor says “USD Duration is 3.4 yrs,” his measure of how long the dollars would cover those payments.
The business doesn’t help pay that bill. Free cash flow has been around zero or below for five years.
So every dividend dollar comes from the reserve, new stock or bitcoin.
The premium is thin
The market still values Strategy above its book value, but only just compared with its own history.
At 1.7x, the stock is far below its 6.2x three-year average and its 25x peak in November 2024. (And that 1.7x uses June 30 book value, when bitcoin was near $58,700. Strategy has already estimated a $20.91 billion gain on its bitcoin for the third quarter, so Thursday’s higher book value will shrink the multiple.)
In May, management put the break-even for selling stock to buy bitcoin at 1.22x bitcoin net asset value. Below that, each new share lowers bitcoin per share.
What Thursday’s report has to show
- Year-to-date BTC Yield, the growth in bitcoin per share, against management’s goal of about 10% a year. It was 4.5% through July 26.
- How much STRC Strategy retired in the quarter, at what discount, and whether its 12% rate changes.
- The USD Reserve and USD Cash at the end of September, and any bitcoin sales. Strategy sold 6,948 bitcoin for about $431.8 million between late May and early August.
- Whether Saylor calls the pause temporary on the 5 p.m. ET webinar.
The stock still trades mostly on bitcoin, so where bitcoin sits Thursday night may move it more than anything in the release.
My take: the dividends are covered for years, so this isn’t a crisis. But Strategy is now a leveraged bitcoin holder that has stopped buying bitcoin, and I wouldn’t count on the premium coming back until STRC sells at par again. Of course, a strong bitcoin rally could widen the premium and reopen stock sales, whatever Thursday’s report says.
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!
