Strategy to repurchase $1.5 B of convertible notes, may sell Bitcoin

Strategy announced on Friday that it will repurchase $1.5 billion of its 0% convertible senior notes due 2029, a move that could be financed partly by selling Bitcoin from its treasury [1][2]. The buyback, priced at an 8% discount to par, reduces outstanding convertible debt from $8.2 billion to $6.7 billion and signals a shift toward active liability management while keeping the option to liquidate Bitcoin for dividend funding [2][3].

Debt buyback and funding mix

The filing details that Strategy will use a combination of cash on hand, proceeds from its at‑the‑market (ATM) offerings of preferred stock and common equity, and “proceeds from the sale of bitcoin” to settle the repurchase, which is slated to close around May 19, 2026 [3]. By retiring the notes at a discount, the company generated a BTC‑equivalent yield of 0.7%, equivalent to roughly 4,391 BTC and a dollar gain of about $333 million without touching its existing Bitcoin holdings [2]. The ATM program has already raised $2.0 billion in STRC preferred stock and $84 million in common stock, financing the acquisition of 24,869 BTC in the prior week [2].

Bitcoin holdings and potential sales

Strategy still controls 843,738 BTC, valued at roughly $63 billion, and reports a year‑to‑date BTC yield of 13.3% after adding 89,378 BTC since the start of the year [2]. Executive Chairman Michael Saylor has previously hinted that the firm could sell Bitcoin to meet dividend obligations, describing such sales as a market “inoculation” rather than a panic‑driven dump [3]. He later downplayed the impact, noting that any dividend‑funding sales would be offset by buying roughly 20 BTC for each one sold [3]. Nonetheless, the mere possibility of a large‑scale Bitcoin liquidation has already weighed on market sentiment, contributing to a 60% decline in Strategy’s share price since its 2025 peak [3].

Preferred stock dynamics

The same filing follows a record‑setting day for Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), which saw $1.53 billion of daily trading volume—an all‑time high that could theoretically raise $735.4 million for the purchase of about 9,066 BTC at current prices [1]. STRC’s market cap has grown to approximately $8.5 billion, making it the world’s largest preferred stock by market cap, and its 11.5% annualized dividend continues to attract institutional demand [1].

What to watch

• Bitcoin price levels around $30,000 and $40,000, which would affect the value of any potential sales used to fund the buyback.
• The outcome of the STRC dividend‑structure vote (closing June 8) and the first semi‑monthly payment expected July 15, which could influence liquidity and demand for the preferred instrument.
• Future SEC filings or earnings calls that confirm the proportion of Bitcoin sales versus cash/ATM proceeds used to settle the note repurchase.

The debt reduction strengthens Strategy’s credit profile and reduces dilution risk from future conversions, but the open question remains how much Bitcoin the firm will actually liquidate and whether that will trigger broader market moves.