Shares of Strategy (MSTR) climbed as much as 6.8% on Monday, snapping a three-day losing streak, after the company disclosed it had not purchased any Bitcoin for the fifth consecutive week. Instead, the firm continued to bolster its cash reserves and repurchase preferred shares under its revised capital allocation strategy.
According to a regulatory filing, Strategy neither bought nor sold Bitcoin during the week ended July 26, leaving its holdings unchanged at 843,775 BTC. The company acquired its Bitcoin treasury at an average purchase price of $75,476 per coin. The pause marks the longest stretch without a Bitcoin purchase since the company adopted its treasury strategy, with the last acquisition of 520 BTC occurring on June 22.
Building a Cash Buffer
Rather than adding to its Bitcoin stash, Strategy raised $544.5 million by selling approximately 5 million common shares during the latest reporting period. While the company introduced preferred stock as a financing tool last year, common equity remains a significant source of capital. The filing also revealed that Strategy increased its U.S. dollar reserve by roughly $525 million to $3.75 billion. The reserve is intended to cover dividend and interest obligations and now exceeds two years of the company's current annual commitments of about $1.759 billion.
Separately, Strategy repurchased 288,930 STRC preferred shares over a six-day period. The company still has $975 million remaining under its authorization to repurchase preferred shares and another $1 billion available for common stock buybacks. Chairman Michael Saylor reiterated the company's approach on social media, stating that the objective is for STRC to trade near $100 with high liquidity and low volatility, and that the company will not issue shares below that price.
Analyst View: Disciplined Capital Allocation
Benchmark Equity Research maintained its Buy rating and $570 price target on Strategy, arguing that the decision to prioritize liquidity over additional Bitcoin purchases reflects disciplined capital management rather than a shift in long-term strategy. Analyst Mark Palmer highlighted that the larger cash reserve provides greater flexibility to fund preferred dividend obligations while preserving the ability to resume Bitcoin purchases when market conditions improve.
“Strategy’s increase in its USD reserve directly addressed the concern that has dominated the bear case on the company’s perpetual preferred stack, namely that dividend and interest coverage depends on continuous access to equity markets,” Palmer wrote. “By pre-funding more than two years of obligations in dollars, Strategy has reduced the near-term sensitivity of those payments to the market’s willingness to absorb new share issuance at any given moment.”
The brokerage added that Strategy's recently introduced Digital Credit Capital Framework allows management to allocate capital among Bitcoin purchases, reserve building, and share repurchases without abandoning its long-term treasury strategy. Bitcoin itself recovered slightly, rising 0.17% over the past 24 hours to $64,576, according to CoinDesk.
Strategy's Bitcoin treasury is currently valued at roughly $54 billion, representing more than 4% of Bitcoin's maximum supply of 21 million coins. The company has also authorized up to $1.25 billion in potential Bitcoin sales to strengthen its U.S. dollar reserve if needed, while noting that share repurchases will be funded outside that reserve. For context, the broader market has seen mixed signals, with Dell stock jumping 9% on sustained AI demand, while European indices slid on surging bond yields.
This article is for informational purposes only and does not constitute financial advice.
