Strategy sells 7.5M shares, boosts cash to $3.2B; no BTC buys

Strategy sold more than 7.5 million common shares across recent reporting periods and increased its designated U.S. dollar reserve to about $3.225 billion, according to a July 20 SEC filing. The company made no Bitcoin purchases for four consecutive weeks and held 843,775 BTC at the end of the period.

The filing shows Strategy issued 2.73 million Class A shares between July 13 and July 19, generating roughly $263.5 million in net proceeds. The firm reported the designated cash reserve rose by about $225 million. An earlier issuance in the prior reporting period raised more than $460 million, bringing the two-week total issuance to over 7.5 million shares.

Strategy last bought Bitcoin on June 22, acquiring 520 BTC for about $35 million at an average price near $67,068. Between June 29 and July 5 the company sold 3,588 BTC for roughly $216 million, reducing the holding to 843,775 BTC. The current position was accumulated at an average cost of about $75,476 per Bitcoin, or about $63.7 billion in total cost. At recent market prices the holdings were worth about $54 billion, implying an unrealized loss of more than $9.4 billion.

Quarter-to-date internal metrics tied to Bitcoin exposure deteriorated. Strategy reported a quarter-to-date BTC Yield of -2.3%, a BTC Gain of -19,247 BTC and a BTC dollar gain of about -$1.2 billion. Year-to-date figures remained positive: a BTC Yield of 5.8%, a BTC Gain of 39,325 BTC and a BTC dollar gain near $2.5 billion.

The enlarged cash reserve is intended to support the company’s preferred-stock financing. Strategy expects roughly $1.76 billion in annual dividends and interest tied to its preferred securities; at about $3.225 billion, the reserve would cover roughly 22 months of those payments, above the 12-month minimum the board approved in June. Part of the cash is designated to back STRC, the firm’s flagship preferred security with a stated value of $100 and a variable annual dividend around 12%. STRC has traded below par since mid-May, recently near $87 after falling to about $75 in late June.

Dylan LeClair, a Bitcoin strategy executive at Metaplanet, described the common-stock sales and cash accumulation as aimed at restoring the preferred-stock funding channel so the company can resume preferred issuances to finance future Bitcoin purchases if security prices recover.

Analyst Adam Livingston applied the Common Equity Bitcoin Exposure (CEBE) metric to the latest issuance. Counting only the $225 million added to the designated reserve, he estimated a decline of about 0.074% in Bitcoin exposure for existing common shareholders, equivalent to roughly 107 satoshis per share or about $25.7 million across the previous share base. Including the full $263.5 million in net proceeds made the transaction modestly accretive under his approach, adding about 52 satoshis per existing share; he attributed the difference to $38.5 million of proceeds not reflected in the reported reserve increase. Livingston estimated Strategy needed roughly $250.9 million of economic value from the issuance to keep common-equity Bitcoin exposure unchanged.

The company issued more common shares while its Bitcoin balance remained unchanged. Whether Strategy redirects future capital into Bitcoin purchases will depend on its preferred-security funding and decisions by management.