Strategy released details about its recent buyback of STRC shares, purchasing nearly 289,000 shares last week for around $25 million. Interestingly, the company did not acquire any additional Bitcoin during this period, instead bolstering its cash reserves.
This move follows the Digital Credit Capital Framework announced at the end of June, which set up to $1 billion in repurchases across multiple securities. STRC, considered the flagship product, was prioritized for early buybacks after its market value dropped well below the $100 stated amount in June.
Understanding the Buyback Strategy
The key lies in how Strategy views its capital structure. Common shareholders hold the residual value after debt and preferred stock claims are met. The company calculates a “Net Bitcoin Per Share” figure by adjusting its Bitcoin holdings for out-of-the-money convertible debt, other debt-like liabilities, preferred stock, and cash reserves.
By purchasing STRC shares without adding Bitcoin, the firm aims to increase the Net Bitcoin Per Share metric, effectively concentrating Bitcoin exposure per share held. This tactic provides investors with a clearer picture of the economic value tied to each common share, which is key as STRC’s market price fluctuated sharply amid recent volatility.
