Strategy, the largest public holder of Bitcoin worldwide, will resume its cryptocurrency purchases once its preferred shares, Stretch (STRC), return to their $100 par value, according to CEO Phong Le. The company, based in the US, halted Bitcoin acquisitions in late June to focus on strengthening its cash position as it navigates a challenging period for digital assets.
Financing Plan Hinges on STRC Par Recovery
Le said Strategy’s ability to issue more preferred shares profitably depends on STRC recovering to its $100 par value. At present, STRC trades near $89, having fallen below par in mid-May. “When Stretch gets back to par, we’ll issue more. We’ll buy Bitcoin. We may continue to beef up our U.S. dollar reserve,” Le stated in a recent interview. Issuing additional shares below par, he explained, is not attractive as it would dilute current holders and weaken the per-share value of the firm’s Bitcoin stockpile.
Strategy’s capital plan has pivoted toward maintaining substantial liquidity, particularly in US dollars. As the company’s reserve has increased from the low $75 range to close to $90, Le attributes this improvement to a buildup in U.S. dollar capital, giving Strategy more flexibility to manage market cycles.
“We’ve learned over the course of the last couple months that having that liquid access to U.S. dollar capital, whether it be one, two, or three years, is quite important,” Le said, emphasizing that maintaining cash reserves can help stabilize the price of STRC and support future Bitcoin investments.
Mini dictionary: STRC (Stretch preferred shares) are a type of equity issued by Strategy that pays dividends and ranks above common stock in the capital structure, providing the company with an alternative way to raise funds for Bitcoin acquisitions or other strategic moves.
Cash Reserve Expands, Bitcoin Purchases Remain on Hold
The firm has not purchased new Bitcoin since late June. Instead, Strategy raised $467 million by selling common stock, increasing its liquid reserves to $3 billion—an amount sufficient to cover the next two years of dividend payouts, according to the company’s estimates.
Strategy’s common shares (ticker: MSTR) dropped over 4% after the recent announcement, trading at approximately $90.80. Although the firm continues to hold more than 840,000 BTC, amounting to roughly 4% of Bitcoin’s total supply, it has been actively managing its portfolio, including intermittent sales since co-founder Michael Saylor began reducing holdings last month.
| Asset | Amount Held | Recent Change |
|---|---|---|
| Bitcoin (BTC) | 840,000+ | No buys since late June |
| Cash Reserve (USD) | $3 billion | + $467 million |
| Stretch (STRC) | Below par ($89) | Target: $100 |
Le cast these moves as part of a broader transformation, stating Strategy is evolving “from being a Bitcoin treasury company to a full digital capital platform.” Analysts at Standard Chartered have described the company’s recent actions as “mostly noise,” after Strategy introduced a new capital framework permitting greater flexibility in selling Bitcoin, repurchasing stock, and safeguarding liquidity.
Le pushed back on speculation that Strategy is abandoning its role as the primary Bitcoin accumulator, noting the company remains the largest identified holder and highlighting that its $216 million in recent Bitcoin sales “did not move the market” given the asset’s $30 billion to $40 billion daily trading volume.
Risk Management and Market Conditions
Le addressed concerns about the company’s exposure in the event of severe market declines. If Bitcoin were to fall to the $8,000 to $10,000 range, he acknowledged that Strategy would need to reconsider its approach to debt obligations. For now, he described the current downturn as part of a recurring cycle, citing a similar experience in 2022, and expressed optimism about the prospects for the next bull market.
Meanwhile, the latest prediction market surveys place the odds of Strategy holding over 1 million BTC by 2027 at just 13%, reflecting skepticism about the pace of future acquisitions. With Bitcoin trading well below its October all-time high and MSTR stock down more than 77% over the past year, the company’s preferred-share engine for buying Bitcoin remains on pause.
“Until that point in time, we feel very secure about the balance sheet,” Le stated, noting the firm’s substantial cash cushion as it waits for more favorable conditions to reignite Bitcoin purchases.
