MicroStrategy Buys More Bitcoin, Boosts Stock Buyback Program
MicroStrategy announced Monday that it acquired an additional 267 Bitcoin for $22.1 million last week, while also repurchasing $193.1 million of its STRC preferred stock.
The Bitcoin treasury firm paid an average of $82,900 per coin, including fees, between October 12 and 18, according to a filing with the Securities and Exchange Commission. This purchase price was lower than the $86,194 per coin it paid for 250 Bitcoin the previous week. MicroStrategy now holds a total of 848,517 Bitcoin, acquired at an average cost of $75,446 per coin for a total investment of $64.02 billion.
The latest Bitcoin acquisition follows a $21.5 million purchase the prior week and is a fraction of the $142.7 million the company spent on Bitcoin in the final week of September.
Michael Saylor, co-founder of MicroStrategy, had previously hinted at the company’s continued interest in Bitcoin, tweeting on Sunday, “We found room for more orange.”
The company financed the recent Bitcoin purchase through the sale of 140,872 shares of its MSTR common stock, raising $22 million via its at-the-market offering program, supplemented by $0.1 million in cash. No preferred stock was sold during this period.
MicroStrategy repurchased 1,938,780 shares of its variable-rate Stretch preferred stock (STRC) using $193.1 million from its “USD Cash” reserves, funds designated for general corporate purposes, including Bitcoin acquisitions.
In addition to the stock buyback, MicroStrategy’s board approved an increase in the total authorized amount for its digital credit securities repurchase program, which encompasses its preferred stock, from $2 billion to $3 billion. Following last week’s buyback and the recent increase, $1.16 billion remained available under this program as of October 18. A separate program for repurchasing MSTR common stock has $1 billion remaining.
The company also utilized $45.5 million from its “USD Reserve,” a fund intended to cover preferred dividends and debt interest, to pay dividends. As of October 18, the USD Reserve held $4.83 billion, and USD Cash stood at $447.3 million, a decrease from $4.88 billion and $640.5 million, respectively, a week earlier.
This latest repurchase continues a trend of weekly STRC buybacks. MicroStrategy repurchased $192.4 million of the stock the week before, and $176 million the week prior to that, during which time it also acquired $29 million in Bitcoin and reported a $21 billion third-quarter gain. In the last week of September, the company repurchased $151.7 million of STRC as it reached a then-record Bitcoin holding of 847,666 BTC.
Meanwhile, MicroStrategy faces potential exclusion from MSCI’s equity indexes. On October 15, the index provider finalized a rule that deems “non-operating companies,” defined as those with balance sheets heavily weighted towards a single asset, ineligible for its Global Investable Market Indexes starting November 30. MSCI is scheduled to publish the list of affected companies on November 11. Such an exclusion would compel funds tracking these indexes to divest their holdings in the affected companies. Saylor has publicly urged MSCI to reconsider what he described as a “discriminatory” rule.
