MSTR
STRC
The bitcoin flywheel hits a speed bump
Peter Schiff took a swing at Strategy over the weekend, arguing the company’s Bitcoin-buying engine is starting to sputter. His basic case: Strategy’s Stretch preferred, STRC, has bounced back near par, which sounds nice until you ask the annoying question — where does the next pile of cheap capital come from?
Monday’s filing says: still buying, just not like before
The company’s Monday 8-K tells a more nuanced story. Between Oct. 1 and Oct. 4, Strategy bought 334 bitcoin for about $28.7 million at an average price of $85,839 each. That’s still very much “we’re in the game” behavior, but it’s a lot smaller than the 1,665 coins it bought the prior week.
To fund it, Strategy said it sold $15.7 million of MSTR shares and kicked in another $13 million in cash. Meanwhile, it also spent $176.3 million repurchasing 1.77 million STRC shares from Sept. 28 through Oct. 4. In other words: the company spent way more extinguishing its preferred shares than stocking up on bitcoin.
Why investors are squinting at the plumbing
That’s the whole trade here. Strategy’s bull case has always had a bit of Rube Goldberg energy — sell one thing, buy another, repeat until the orange coin goes higher. If STRC can’t keep serving up fresh funding, the machine gets less magical and more like a very expensive treadmill.
The company still says it has a hefty cushion, including a $4.88 billion reserve and $833.4 million in additional cash, which helps support those STRC dividends for now. But when a bitcoin treasury company starts looking more like a capital-structure puzzle than a one-way bet on BTC, the market tends to notice.
Big picture
Strategy is still buying bitcoin, but the pace is wobbling and the financing mix is getting more expensive. That’s enough to keep both the believers and the skeptics glued to every filing like it’s the season finale.