Strategy, the world's largest corporate holder of Bitcoin, has sold another chunk of its cryptocurrency holdings while issuing millions of new shares, building up a multibillion-dollar cash reserve as it tries to strengthen its balance sheet. Its stock is falling.
The company sold 1,690 Bitcoin for about $108.6 million during the seven days ended Aug. 9, marking its second consecutive week of Bitcoin sales after years in which accumulating the cryptocurrency was at the heart of its strategy.
At the same time, Strategy sold approximately 6.6 million shares of its Class A common stock, raising about $653.1 million.
The transactions helped push the company's U.S. dollar reserve to approximately $4.65 billion, according to Strategy's latest filing with the U.S. Securities and Exchange Commission.
The latest moves represent a striking change for a company whose executive chairman and co-founder, Michael Saylor, has spent years promoting an aggressive Bitcoin accumulation strategy.
Strategy used part of the money generated from its Bitcoin sales to repurchase shares of its variable-rate Series A perpetual preferred stock, known as Stretch or STRC.
The company repurchased approximately 1.15 million STRC shares for $108.6 million during the latest reporting period.
STRC has recently been trading below its $100 par value, limiting Strategy's ability to use new STRC issuance as an attractive source of capital.
The preferred shares were falling more than 3% on Monday, clocking in at $96.42 at 2:42 p.m. ET. They have not traded above the $100 level needed to make fresh issuance attractive since early May.
Strategy previously envisioned STRC as an important financing tool that could reduce its reliance on issuing common shares, which can dilute existing MSTR shareholders.
But with STRC trading below par, the company has increasingly turned to other parts of its capital structure.
That has included selling common stock — and, more unusually for Strategy, selling Bitcoin.
The latest transactions come just one week after the company sold 1,638 Bitcoin for approximately $104.7 million and issued roughly 3 million MSTR shares for about $290.6 million.
Strategy also repurchased more than 912,000 STRC shares for approximately $81.2 million during that period.
Despite the recent sales, Strategy remains by far one of the world's biggest institutional holders of Bitcoin.
Following the latest transactions, the company held 840,447 Bitcoin, according to its regulatory filing.
