Strategy skips Bitcoin buy, repurchases $25 M STRC preferred stock

Strategy bought back $25 million of its Stretch (STRC) preferred shares on July 27, 2026, while again forgoing a Bitcoin purchase for a fifth consecutive week [1]. The move signals a shift toward strengthening the cash reserve and managing dividend obligations rather than expanding its Bitcoin holdings.

Cash reserve build‑up and dividend coverage

Strategy’s filing shows a $525 million addition to its USD reserve, lifting total cash to $3.75 billion [2]. This cash now covers 2.1 years of preferred‑dividend and debt‑interest payments, against an annual obligation of $1.76 billion [2]. The reserve growth comes from selling 5,429,160 MSTR common shares between July 20‑26, which generated $544.5 million in net proceeds [1]. The firm still holds 843,775 BTC, valued at over $55 billion at the $65,576 price level, unchanged since a June 22 purchase of 520 BTC for $35 million [1].

First STRC repurchase under $1 B authorization

The $25 million buyback marks the first use of Strategy’s $1 billion Digital Credit Securities Repurchase Program, approved on June 29, 2026 [2]. It involved purchasing 288,930 STRC shares, drawing down the program to $975 million remaining, while a separate $1 billion authorization for common‑stock repurchases stays untouched [2]. STRC has traded below its $100 par value since mid‑May, with a recent pre‑market price of $88.61, up 1.99 % [2]. The repurchase aims to bolster balance‑sheet strength rather than signal a retreat from Bitcoin exposure, according to CEO Phong Le [1].

Market reaction and valuation gap

MSTR shares rose nearly 7 % to about $98 on the day of the announcement [1]. Despite the price gain, the stock remains roughly 40 % below its year‑to‑date high and trades at a discount to the value of the Bitcoin it holds—Strategy’s market cap is now lower than its Bitcoin treasury, a reversal from earlier years when a premium existed [3]. The premium’s erosion has forced the firm to rely more on preferred‑share financing, which now carries a $1.7 billion annual dividend bill [3]. With STRC trading well under par, issuing new preferred shares would be costly, limiting future Bitcoin purchases.

What to watch

• Cash reserve level – Any further increase or depletion could affect the 2.1‑year dividend coverage metric.
• STRC price relative to $100 par – A sustained breach below $90 may constrain the firm’s ability to raise capital via preferred‑share issuance.
• Bitcoin purchase activity – A resumption of Bitcoin buys would indicate a shift in capital allocation strategy; watch for any SEC filings or at‑the‑market program activity.

The fifth consecutive week without a Bitcoin purchase, coupled with the first STRC buyback, underscores Strategy’s pivot toward cash‑reserve fortification and dividend management, while the widening gap between its market valuation and Bitcoin treasury raises questions about future financing flexibility.