MSTR holders fund $1.59 billion cash pile that may never become Bitcoin

Strategy raised $2.0065 billion by selling 18,261,118 common shares from Aug. 17 through Aug. 23. Strategy bought no Bitcoin during that period. The company used $136.4 million to repurchase 1,431,212 STRC preferred shares. Strategy transferred $300 million to its USD Reserve. The company placed the remaining $1.5701 billion into USD Cash under its Aug. 24 filing. Strategy reported $5.10 billion in its USD Reserve and $1.59 billion in USD Cash. The balances included expected proceeds from ATM shares that had not settled. Strategy held 840,447 BTC after making no Bitcoin purchase or sale during the week. The Bitcoin holdings had an aggregate cost of $63.36 billion and an average cost of $75,385 per coin. Strategy designates its USD Reserve for preferred dividends and interest on outstanding debt. Strategy may use USD Cash to buy Bitcoin, cover those obligations, repurchase MSTR or preferred shares, repay or redeem convertible notes, increase the reserve, or pursue similar Bitcoin Treasury Company purposes. These uses are permitted options rather than commitments to buy Bitcoin. Strategy's basic share count reached 415.929 million on Aug. 23. The issuance increased the implied pre-week basic share count by about 4.59%. The calculation uses reported and rounded totals and is not a GAAP diluted-earnings measure. The filed sale totals imply average net proceeds of about $109.88 per share. Strategy retained $516.6 million of preferred-security repurchase authorization after the transactions. The company also retained $1 billion of MSTR repurchase authorization. Neither authorization commits USD Cash to those uses. The filing says management will use the flexible pool to respond to market conditions, including dislocations in Bitcoin or Strategy securities. The filing does not set a fixed deployment threshold. STRC closed at $97.15 on Aug. 25 and traded at $97.10 after hours. Those prices were about 2.9% below the $100 stated amount. Management cited STRC prices of $95 or $90 as possible levels for support. Management also said it would consider MSTR repurchases at a sufficiently deep discount to net asset value. Those levels were guideposts rather than binding rules. Bitcoin traded at about $78,780 on Aug. 26. Strategy has disclosed no price-based Bitcoin buying trigger for USD Cash. Future deployment could target Bitcoin, discounted preferred or common shares, convertible debt, or dollar obligations.