Strategy Drops $1.28 Billion on Bitcoin, Issues $377 Million in Preferred Shares

Strategy spent $1.28 billion on it Bitcoin Last week it recorded its biggest purchase in more than a month with funds drawn in part from STRC, its variable-rate preferred stock.

The Tysons Corner, Virginia-based company now owns approximately 738,750 Bitcoin, according to a press release. With the digital assets changing hands around $68,500 on Monday, the Bitcoin buying company’s stock was worth $50.5 billion.

Last week, Strategy raised $377 million by issuing STRC, a product that pays a variable monthly dividend – currently 11.5% annualized. Meanwhile, the company has issued nearly $900 million in common stock.

STRC’s price is targeted to be around $100, and when the preferred stock trades above that threshold, Strategy has indicated it will issue more STRC and use the proceeds to buy Bitcoin. To date, the company has issued a dividend-paying product worth $3.8 billion.

Strategy has been relying on STRC as an alternative funding source for months, but the latest announcement marks a milestone. The only other time Strategy has revealed that more STRCs were issued at once was during the product period $2.5 billion debut in July.

“The second century begins,” Strategy co-founder and executive chairman Michael Saylor posted to X on Sunday. Last month, the company recorded its 100th Bitcoin purchase since its journey to becoming the largest corporate holder of the digital asset began in 2020.

The company’s stock price rose 2.8% to $137, according to the report Yahoo Finance. While that was above last month’s low of $104, shares are still down 58% in six months.

Since STRC’s launch last year, the company has increased its dividend nine times positioning the product as a cash instrument with low volatility and high returns.

Strategy’s unveiling on Monday marks the second-largest Bitcoin purchase of the year, following the purchase of 22,300 Bitcoin in January. At the time, Strategy raised $294 million through STRC, along with $1.8 billion in company common stock.

The average purchase price for Bitcoin in Strategy’s treasury fell to around $75,800 in the most recent purchase. That meant the company suffered an unrealized loss of about $5.5 billion on its assets, funneling $56 billion into Bitcoin over time.

Products like STRC saddle Strategy with additional monthly costs, which some analysts argue to describe the company’s creation of cash reserves last year as prudent. Still, the company’s approach has attracted a lot of attention as its share price has tumbled in recent months.

Monday traders on Myriad signed in a 14% chance that Strategy will sell Bitcoin this year. Last month, traders on the prediction market platform owned Declutter parent company DASTAN predicted no less than a 35% chance that that would happen.