Strategy Offloads $105M in Bitcoin at a Loss to Bolster Preferred Shares

Good morning. Strategy, the corporate vehicle associated with MicroStrategy's Michael Saylor, quietly sold additional Bitcoin last week. The transactions are being interpreted as an effort to support its preferred shares, even though the sales were executed below the company's average purchase price. Strategy sold 1,638 BTC for $104.7 million, according to an 8-K filed Monday. The company's Bitcoin holdings fell to 842,138 BTC from 843,775 BTC, a level it had maintained since early July. The sales were completed at an average price of $63,957 per BTC, about $11,500 below Strategy's $75,419 cost basis, resulting in a realized loss. Strategy has not purchased Bitcoin since June 22, marking its longest buying pause to date. The company also sold $291 million of MSTR shares. Strategy said the Bitcoin sale proceeds were directed to preferred-share obligations. About $52.4 million was used to pay dividends on its STRC preferred stock. Another $52.3 million supported an $81 million repurchase of STRC preferred shares, the second buyback in two weeks under a $1 billion authorization. The remaining funds helped lift cash reserves to roughly $4 billion, which Strategy describes as around 2.3 years of runway. The move underscores a widening tension in the capital structure. Strategy is selling Bitcoin at a loss and reducing exposure to MSTR common stock to stabilize STRC, which has traded below its $100 par value since mid-May. Investors have flagged the approach as potentially unfavorable to common shareholders, as it prioritizes preferred holders and can increase dilution risk. Saylor has also adjusted his public messaging. On Monday he wrote, "When I say 'Never Sell Your Bitcoin,' I speak as one saver to another. I have never sold mine," adding that Strategy, as a public company, may buy or sell BTC to manage capital. The comments stand in contrast to earlier, more absolute statements, and highlight the difference between Saylor's personal stance and the company's balance-sheet decisions. In the broader market, Bitcoin prices were little changed over the week despite negative headlines, including reports of a $100 million-plus Coldcard hack and Strategy's $100 million-plus sale. The muted reaction suggests bad news may be having less immediate impact, potentially reflecting the current phase of the market cycle. Note: Morning Minute is a daily newsletter by Tyler Warner. The analysis and opinions are his own and do not necessarily reflect those of Decrypt.