Strategy spends record $193.1 million on STRC buybacks near $100 par value

Strategy disclosed a record $193.1 million in STRC repurchases last week, paying an average of $99.60 per share. The purchases occurred within 0.4% of STRC's $100 par value. The same SEC filing expanded Strategy's STRC buyback authorization from $2 billion to $3 billion.

However, Strategy's July guidance said repurchases would decline as STRC approached $100 per share. CEO Phong Le said Strategy intended to purchase more shares at larger discounts and fewer shares as STRC approached $100. Weekly filings instead show that repurchase spending accelerated as STRC's price increased.

STRC reached a low of $71.25 this year, but Strategy made no repurchases during that week. Strategy also refrained from repurchases when STRC traded in the $80s and lower $90s. Before Strategy's record spending, STRC had recovered 98.6% of the distance toward its intended $100 price.

Strategy repurchased about $25 million of STRC during the week of July 20 at an average price of $86.53 per share. By the week ending October 18, Strategy's weekly spending was 7.7 times that amount, at a price $13 per share higher. Strategy's two biggest weekly STRC repurchase totals occurred in October, near STRC's highest price this year. Strategy spent $192.4 million at an average of $99.58 per share during the week ending October 11. Strategy exceeded that total last week with the $193.1 million purchase at $99.60 per share. Strategy critic Derin Olenik wrote that the latest repurchases represented 19.5% of total trading volume.

Strategy financed the latest repurchases with a shrinking reserve called "USD Cash", which differs from Strategy's total cash. Strategy's cash reserves are declining, and Strategy replenishes those reserves mainly by issuing and selling additional MSTR shares, diluting common shareholders. Strategy also occasionally sells small quantities of BTC and earns modest revenue from software sales. Unlike STRC's share supply, MSTR's share supply has increased throughout this year.

Strategy has spent $1.84 billion in cash buying back STRC since July. Common shareholders supplied nearly all that cash through transactions that diluted common shareholders, with small bitcoin sales also contributing. Strategy retired 18.9 million STRC shares carrying $1.89 billion in stated par value.

Strategy's next weekly filing covering any STRC repurchases is expected on Monday, October 26. Shareholders will meet two days later to vote on daily dividend payments for STRC and Strategy's other dividend-paying stocks. Strategy will release third-quarter financial results on October 29.