Key facts
- Strategy's preferred stock, STRC, has increased by more than 30% from its June low, trading around $94.
- The company sold 5,226 BTC for $321 million to cover dividend obligations.
- Strategy has repurchased $106 million of STRC, aiming to return it to its $100 stated value.
- The company's U.S. dollar reserve has grown to $4 billion, providing approximately 2.3 years of coverage for dividend obligations.
- Bitcoin's price has stabilized above $60,000 for several weeks.
Strategy's preferred stock, STRC, has seen a significant rebound, climbing over 30% from its late June low to trade around $94. This recovery follows a period where bitcoin, a key asset for the company, fell below $60,000. Strategy has actively managed its holdings by selling 5,226 BTC for $321 million across three transactions, reducing its total bitcoin holdings to approximately 842,137 BTC. These sales were intended to demonstrate the company's ability to utilize its bitcoin reserves to meet dividend obligations.
In addition to bitcoin sales, Strategy has repurchased $106 million of its preferred stock, STRC, as part of an effort to return it to its $100 stated value. The company also bolstered its U.S. dollar reserve by an additional $250 million, bringing the total to $4 billion. This substantial reserve provides roughly 2.3 years of coverage for its preferred securities' dividend obligations, while the annualized dividend rate for STRC remains at 12%.
The stabilization of bitcoin's price above $60,000 for several consecutive weeks has also contributed to the positive sentiment. Strategy noted that following STRC's initial public offering, it took 70 trading days for the security to reach par value after trading at $90. Applying a similar timeframe from when STRC fell outside its target range in late May, the company is looking at September 8 as a potential date for the preferred stock to return to its $100 par value, though market conditions remain a factor.