Table of Contents

• You might want to know


• Main Topic


• Key Insights Table


• Afterwards...

You might want to know

• Why did Strategy fund a $139.3 million repurchase of STRC from its USD Cash reserve rather than using other liquidity?

• What do Strategy’s unchanged Bitcoin holdings and remaining repurchase authorizations imply about its capital allocation priorities?

Main Topic

During the week ending September 13, Strategy repurchased 1,420,467 shares of its STRC preferred stock for a total of $139.3 million, according to an 8-K filed with the Securities and Exchange Commission. The company funded the buyback entirely from its USD Cash reserve, a liquidity pool that the firm uses for share repurchases, dividends, and potential Bitcoin purchases.

This repurchase represented a slowdown from the previous week, when Strategy spent $176.3 million on buybacks after its board increased the cap on the digital credit securities repurchase program to $2 billion. The most recent $139.3 million outlay reduced USD Cash from $1.44 billion to $1.30 billion as of September 13—an amount that aligns closely with the reported buyback total.

Notably, Strategy neither bought nor sold any Bitcoin during the period, leaving its holdings unchanged at 845,050 BTC for a second consecutive week. That Bitcoin stack was accumulated for $63.73 billion at an average cost of $75,412 per coin, inclusive of fees. Strategy also did not repurchase any other preferred share classes (STRF, STRK, STRD) nor did it buy back any MSTR common stock during this reporting interval.

Under the newly doubled program, about $1.05 billion remains available for repurchases of digital credit securities out of the $2 billion authorization. A separate $1 billion authorization for repurchasing MSTR common shares remains untouched at present. These remaining authorizations indicate that Strategy preserves flexibility to allocate further capital to securities repurchases while maintaining cash reserves for operational or other strategic uses.

On the balance-sheet side, Strategy reported $5.10 billion in the USD Reserve, which supports preferred dividend and interest obligations, and $1.30 billion in USD Cash. These balances provide a buffer for servicing liabilities and executing capital actions without immediately disturbing the company’s Bitcoin holdings.

Strategy’s internal credit dashboard estimates STRC’s BTC Credit spread—the risk premium implied by pricing the security against Strategy’s Bitcoin collateral—at roughly 57 basis points, assuming a 10% annualized Bitcoin return, 40% volatility, and Bitcoin priced near $77,266. On Strategy’s own scale, securities with spreads under 150 basis points are classified as investment-grade, so STRC currently falls into that category.

The same dashboard places Strategy’s aggregate Bitcoin reserve at $66.2 billion with a blended breakeven annualized return of 2.48% and a duration of 40.3 years. In practical terms, the breakeven return is the annual price appreciation needed for the reserve to cover its costs, while the long duration suggests that Strategy views the position with a multi-decade horizon, providing a cushion against short-term price volatility.

Separately, Strategy faces potential indexing-related risks. MSCI is considering a proposal that may remove “non-operating companies” like Strategy from certain global equity benchmarks. The consultation period for feedback closes on September 30, with a decision expected by October 16. Any change to index inclusion could influence passive fund flows tied to Strategy’s index weighting and potentially move billions in assets.

In summary, the recent week saw a moderate retreat in repurchase activity relative to the prior period, with Strategy allocating $139.3 million to buy back STRC shares from USD Cash while leaving its Bitcoin position unchanged. Available repurchase authorizations remain substantial, and internal analytics continue to classify STRC as investment-grade under current assumptions.

Key Insights Table

Afterwards...

Looking ahead, several areas merit attention. Continued monitoring of internal liquidity pools—particularly USD Cash and USD Reserve—will be important for assessing the company’s ability to balance buybacks, dividends, and potential additional Bitcoin purchases without impairing obligations. Enhanced transparency around allocation priorities could help investors better understand when the company will prioritize repurchases versus growing its Bitcoin position.

On the risk-management front, refining metrics that link credit spreads to realistic stress scenarios for Bitcoin price and volatility would improve the robustness of investment-grade assessments. Additionally, observing the outcome of MSCI’s consultation is critical: if index exclusion occurs, Strategy should evaluate alternative avenues for maintaining liquidity and market access, including targeted investor outreach or adjustments to capital return programs.

Finally, as digital-asset exposures grow across corporate treasuries, broader exploration of hedging techniques, derivative overlays, and diversified collateral strategies could reduce dependency on single-asset dynamics and support long-term stability. These considerations will shape how companies like Strategy navigate capital allocation in an evolving regulatory and market environment.