Strategy buys back nearly $1B in preferred stock STRC to stabilize price near par value

Strategy Inc., the company formerly known as MicroStrategy, has spent roughly $950 million buying back its own preferred stock since late July, successfully pushing the security from the mid-$70s back toward its $100 stated value.

The preferred security in question, STRC (formally the Variable Rate Series A Perpetual Stretch Preferred Stock), trades on Nasdaq and was designed to hover near its $100 par value. When it slid into the $70-$75 range, Executive Chairman Michael Saylor and his team stepped in as the buyer of last resort.

The buyback math

Strategy initially authorized up to $1 billion in STRC repurchases on June 29. That cap has since doubled to $2 billion.

As of mid-September, the company has repurchased approximately 9.96 million STRC shares. The total bill sits around $950 million, meaning they’ve already burned through nearly half of the expanded authorization in roughly two months.

During one particularly active stretch ending August 30, Strategy scooped up 1.55 million shares for $151.8 million. The average price on that batch was $97.48, just a hair below par. That’s a meaningful improvement from the sub-$80 levels that triggered the campaign in the first place.

STRC has climbed back into the high $90s, approaching that $99-$100 target range where a preferred security pegged to a $100 stated value should trade.

A dividend sweetener on top

Effective July 1, the company raised STRC’s dividend rate to 12%, part of what it calls its Digital Credit Capital Framework. A 12% annual payout on a security with a $100 face value means $12 per share per year flowing out to preferred shareholders.

Bitcoin takes a back seat

The company has reported no recent Bitcoin purchases during this period, a departure from the relentless accumulation strategy that defined Saylor’s tenure. Buying your own preferred stock at a 25% discount to stated value is essentially manufacturing equity value out of thin air.

What this means for the market

The $2 billion authorization leaves plenty of dry powder. With roughly $950 million deployed and STRC approaching par, the pace of buybacks may slow unless another selloff materializes.

Strategy is essentially using cash reserves and common stock ATM proceeds to fund these repurchases, which means the cost is borne either by the balance sheet directly or by diluting common shareholders. As long as STRC trades near par and the 12% dividend remains covered, the math works.