Strategy Doubles Preferred-Securities Repurchase Authorization to $2 Billion

Strategy doubled the authorized size of its preferred-securities repurchase program to $2 billion, giving the bitcoin treasury company more room to keep buying back its Digital Credit preferred stock after a steady run of STRC purchases.

The board increased the aggregate purchase-price authorization from $1 billion to $2 billion on September 8. As of September 7, $1.19 billion remained available under the enlarged program. The authorization includes commissions, fees and expenses as well as repurchases already completed, so the $2 billion figure is a cumulative ceiling rather than $2 billion of fresh capacity on top of prior spending.

The increase accompanied another large STRC buyback. Strategy disclosed in its September 8 Form 8-K that it repurchased 1,810,885 shares of Variable Rate Series A Perpetual Stretch Preferred Stock for an aggregate $176.3 million between August 31 and September 7. It did not repurchase STRF, STRK, STRD or MSTR common stock during the same period.

STRC remains the priority inside the broader program

Strategy created the Digital Credit Securities Repurchase Program on June 29 with an initial authorization of up to $1 billion. The program covers four outstanding preferred-stock series: STRF, STRC, STRD and STRK. In its original capital-framework announcement, the company said STRC would be the initial priority when management viewed repurchases as accretive and as strengthening the capital structure.

The company’s later filings make clear that the authorization does not require a minimum level of buying. Timing and size can depend on market conditions, the trading price and liquidity of STRC, applicable legal requirements, available capital and other considerations. Strategy can also modify, suspend or discontinue the program. Doubling the ceiling therefore expands discretion rather than committing the company to spend the remaining $1.19 billion.

STRC has nevertheless absorbed the program’s purchases so far. Strategy began buying the preferred shares in July after adopting a policy aimed at supporting STRC trading near its $100 stated amount. Through July 26, it had repurchased 288,930 STRC shares for about $25 million at an average price of $86.53 per share, which the company described as a 13.47% discount to the $100 stated amount.

The pace accelerated in August. By August 30, only $364.8 million remained under the original $1 billion authorization after Strategy spent $151.8 million that week to repurchase 1,557,177 STRC shares. The September 8 filing then reported another $176.3 million of STRC purchases and the board’s decision to add $1 billion to the program ceiling. Those disclosures show that the larger authorization follows substantial use of the original capacity rather than simply establishing a dormant reserve.

Latest purchases came from Strategy’s USD Cash account

Strategy funded the latest $176.3 million of STRC repurchases with what it calls USD Cash. The company separates that account from its USD Reserve, which is intended to support preferred-stock dividends and interest on outstanding debt. USD Cash is available for broader capital-management purposes, including bitcoin purchases, additions to the reserve and other uses within Strategy’s bitcoin treasury framework.

As of September 7, Strategy reported a USD Reserve balance of $5.10 billion and USD Cash of $1.44 billion. The company did not sell shares through its at-the-market offering programs during the August 31 to September 7 reporting period, and it did not buy or sell bitcoin. That means the week’s STRC repurchases were funded from cash already held in the USD Cash account rather than from contemporaneous ATM issuance or bitcoin sales.

The distinction matters because Strategy has said that STRC repurchases are expected to be funded from sources other than the USD Reserve. Its second-quarter filing identified potential sources including proceeds from future class A common-stock ATM sales and, depending on market conditions, bitcoin sales. The September update shows that the company used existing USD Cash for this round instead.

Strategy’s bitcoin position was unchanged during the week. As of September 7, the company held approximately 845,050 bitcoin acquired for an aggregate $63.73 billion, or an average purchase price of about $75,412 per bitcoin including fees and expenses. The decision not to buy or sell bitcoin in the latest period leaves the preferred-stock repurchase as the main capital-allocation activity reported in the filing.

The $2 billion ceiling is separate from the MSTR buyback

The expanded Digital Credit Securities authorization is distinct from Strategy’s repurchase program for its class A common stock. The company still had $1 billion available under the MSTR common-stock program as of September 7, and it reported no MSTR repurchases for the latest week. The September 8 board action increased only the preferred-securities program.

That separation is important because the two authorizations serve different parts of Strategy’s capital structure. The Digital Credit program can be used for STRF, STRC, STRD and STRK, while the MSTR program applies to common shares. Strategy has described STRC as the initial priority among the preferred securities and has paired that approach with a dividend policy intended to support trading around the preferred stock’s $100 stated amount.

At the end of July, Strategy said the regular annual dividend rate on STRC would remain at 12% until the shares demonstrated sustained, healthy trading near $100. The dividend rate is evaluated monthly and remains subject to board declaration. Repurchasing STRC below its stated amount has therefore become one part of a broader effort to manage the preferred-stock platform alongside dividend policy, liquidity reserves and the company’s bitcoin-focused capital framework.

After the September 8 increase, Strategy has materially more room to continue that policy if management decides further repurchases meet its criteria. The authorization has no fixed expiration date and can be modified, suspended or terminated. When it established the capital framework, Strategy said it expects to disclose material bitcoin monetization and other capital-markets activity through its customary Form 8-K practice.