Strategy stock jumps as company buys 1,587 Bitcoin

Strategy shares climbed more than 8% on Monday after the company disclosed it acquired 1,587 Bitcoin for roughly $100 million. The filing with the U.S. Securities and Exchange Commission shows the purchase took place between June 8 and June 14. Analysts said the acquisition reduces near-term liquidation risks tied to the firm’s Bitcoin holdings.

The purchase raised Strategy’s total holdings to 846,842 BTC. Executive Chairman Michael Saylor reported an average purchase price of $63,024 per coin. The company reported its total outlay on Bitcoin, including fees and expenses, at about $64.1 billion. Strategy’s holdings now represent more than 4% of Bitcoin’s 21 million-coin maximum supply.

Strategy funded the purchase entirely through common-stock sales. The company raised about $209 million by selling 1.73 million Class A shares under its at-the-market equity program. No preferred shares — including STRF, STRC, STRK or STRD — were issued during the week. The firm noted STRC preferred shares have been trading below their $100 par value recently and that the company generally issues STRC only when those shares trade at or above par.

The pace of purchases has slowed from earlier in the accumulation campaign, which included multibillion-dollar buys. Last week’s acquisition followed a purchase of 1,550 BTC for $101.3 million the previous week. Strategy reported it still has about $25.7 billion available under its common-stock issuance program. The company’s U.S. dollar reserve stood at $1.1 billion as of June 14, up from $1 billion a week earlier.

Investor concern has focused on whether falling Bitcoin prices could force Strategy to sell coins to meet obligations tied to its preferred-share programs. The debate intensified after the company sold 32 BTC between May 26 and May 31 to help fund distributions related to STRC preferred shares; that was the first Bitcoin sale since the firm began accumulating the asset in December 2022.

Benchmark analyst Mark Palmer pushed back on those liquidation scenarios in a research note. He wrote, “The death-spiral story assumes that Strategy is one bad week from selling bitcoins, and it skips several steps to get there.” He added that Strategy would first need to exhaust its cash reserve set aside for dividend payments before any meaningful Bitcoin sale, and that the company would have to move through multiple failures before its Bitcoin reserve, currently valued at almost $55 billion, would become the primary option.

Strategy, formerly known as MicroStrategy, shifted its treasury approach to accumulate Bitcoin in late 2022. The latest disclosures show the company continues to add to its holdings while relying primarily on common-stock sales for funding.