CryptoSlate
Strategy's discretionary USD Cash fell 72% to $447.3 million as the company spent $193.1 million repurchasing STRC preferred stock and only $100,000 of cash on Bitcoin. The company raised its STRC repurchase authorization by 50% to $3 billion, with about $1.16 billion still available. Its Bitcoin holdings reached 848,517 BTC after a $22.1 million purchase at an average price of $82,900.
Why it matters
The capital allocation shift is becoming harder to ignore. Strategy spent nearly nine times more on STRC buybacks than on Bitcoin during the latest week, extending total STRC repurchases to roughly $1.84 billion since July. The latest purchases averaged about $99.60 per share, leaving only a 0.4% discount to the preferred stock's $100 stated value.
Discretionary cash fell from $1.61 billion on Aug. 30 to $447.3 million on Oct. 18. The separate $4.83 billion USD Reserve remains earmarked primarily for preferred dividends and debt interest, so it is not the same pool available for discretionary buybacks or Bitcoin purchases.
Market impact
At the latest weekly repurchase pace, the remaining discretionary cash would cover about 2.3 weeks of STRC purchases. Strategy would then need to replenish that balance or use another funding source if it wants to maintain the current support for STRC. Mark Harvey said the company has repurchased about one-fifth of STRC's outstanding shares without securing a sustained return to $100.
MSTR fell 11.35% over the five trading sessions through Oct. 16 as MSCI's proposed rules raised the risk of exclusion from major benchmarks. JPMorgan estimated that deletion could trigger about $2.8 billion in forced selling by passive funds. Strategy reports third-quarter earnings on Oct. 29, while MSCI's final deletion list is due Nov. 11 before the rules take effect after Nov. 30.
Frequently asked questions
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How much discretionary cash does Strategy have left?
Strategy had $447.3 million in discretionary USD Cash as of Oct. 18, down from $1.61 billion on Aug. 30.
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How large is Strategy's new STRC repurchase authorization?
The authorization rose 50% to $3 billion, leaving approximately $1.16 billion available for additional STRC purchases.
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How much Bitcoin did Strategy buy during the latest week?
Strategy bought $22.1 million of Bitcoin at an average price of $82,900, increasing its holdings to 848,517 BTC.
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How long could Strategy's remaining cash fund buybacks?
The remaining $447.3 million in discretionary cash would fund about 2.3 weeks of repurchases at the latest weekly pace of $193.1 million.
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Why is MSCI exclusion a risk for MSTR?
MSCI's proposed rules could remove Strategy from major benchmarks. JPMorgan estimated that the change could trigger approximately $2.8 billion in forced selling by passive funds.
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