(June 22): Michael Saylor’s Strategy Inc bought US$39.4 million of bitcoin, leaning again on its common stock to fund purchases of the cryptocurrency for a third consecutive week despite earlier pledges to pivot to perpetual preferred shares.
The company, formerly known as MicroStrategy, bought 520 bitcoin between June 15 and June 21, according to a regulatory filing Monday. The entire purchase was funded through sales of Class A common stock. Strategy increased its reserve by US$300 million to US$1.4 billion.
At the start of June, Strategy disclosed it had sold 32 bitcoin, its first sale since 2022. The amount was negligible relative to holdings worth around US$57 billion but the symbolism was significant. For years, Saylor built Strategy around a simple premise: raise capital to buy bitcoin and do not sell it. The disclosure challenged that narrative and helped deepen a rout that sent the crypto world shuddering.
The move appeared designed to show that the largest corporate owner of the cryptocurrency was willing to use bitcoin to support its dividend payout for its preferred obligations. Instead, it raised fresh doubts about the durability of the structure.
The perpetual preferred shares that Strategy began selling in 2025 give Saylor a way to keep buying without punishing the investors who own the common stock. The firm is paying an 11.5% annual yield, reset monthly and hiked several times since launch, to attract capital that it uses to buy an asset currently trading below its cost basis. For this strategy to remain viable, bitcoin needs to appreciate faster than Strategy’s obligations compound.
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The so-called Stretch preferred shares were designed to serve as a capital-raising machine in which Strategy sells the securities at a US$100 par value and immediately buys bitcoin while investors receive the double-digit annual dividend payment.
However, the hybrid securities haven’t traded at US$100 since May 15, the ex-dividend date for last month’s payout. Under par, the firm is actually raising capital at a loss as it ends up paying a higher effective yield. The price of Stretch, or STRC, closed below US$90 last week.
Strategy’s common shares rose 4.4% to US$117.52 in early trading. The stock has tumbled almost 70% in the past year. Bitcoin, up about 2.4% to US$65,300 on Monday, is down around 37% in the same period.
Uploaded by Arion Yeow
