Strategy Raises $2 Billion by Selling Shares, Boosts Cash Reserves Without Changing Bitcoin Holdings

Strategy Sells Shares to Raise $2 Billion in Cash

Strategy, a company that holds bitcoin as part of its treasury, raised about $2 billion last week by selling 18.26 million shares of its common stock. The company did not buy or sell any bitcoin during this time, keeping its holdings steady at 840,447 BTC, worth around $65.6 billion.

The funds raised were split into three parts: $300 million was added to its USD Reserve, $136.4 million was used to buy back preferred stock, and the remaining amount was placed into a new cash pool called “USD Cash.”

How the Funds Were Allocated

• Sold 18.26 million shares of common stock to raise $2 billion.
• Added $300 million to the USD Reserve, bringing it to $5.1 billion.
• Repurchased $136.4 million of preferred stock (STRC).
• Created a new $1.59 billion cash pool for flexible use.

Purpose of the New Cash Pool

The USD Reserve is set aside for paying dividends on preferred stock and covering debt interest. The new USD Cash pool, however, gives the company more flexibility. It can be used for buying bitcoin, repurchasing shares, repaying debt, or other corporate needs.

Strategy said this flexibility allows it to act quickly if market conditions change, such as shifts in bitcoin prices or the value of its own securities.

Bitcoin Holdings Remain Unchanged

Strategy’s bitcoin holdings stayed at 840,447 BTC, purchased at an average price of $75,385 per bitcoin. The total cost of these holdings, including fees, is $63.36 billion.

The company has repurchased about $483.4 million of its preferred stock so far under a $1 billion program. It still has $516.6 million left to spend on these buybacks. Another $1 billion program for repurchasing common stock remains untouched.

Market Reaction

After the announcement, Strategy’s common stock (MSTR) rose about 1.2% in pre-market trading, while its preferred stock (STRC) traded at $96.49. Bitcoin’s price was above $78,000 at the time.

What This Means for Strategy

The additional cash reserves give Strategy more options to manage its finances without selling its bitcoin holdings. The company can now respond faster to opportunities or challenges in the market.

Sources

• CoinDesk