Strategy Pays $79,012 a Coin for 1,036 Bitcoin, Above Its Own Average

Strategy bought 1,036 bitcoin last week at an average of $79,012 each, pricier than the $75,456 it has paid on average for its whole stack, its Form 8-K filed Monday shows.

That means the newest coins are already worth less than they cost. Bitcoin traded near $74,950 at 11:55 a.m. ET on Monday, per CoinGecko. Black Mint reported Sunday that bitcoin had slipped below Strategy's average cost; the new buy nudged that average up by $5.

The money went somewhere else first

Strategy raised $283.8 million after commissions by selling 2,051,348 Class A shares through its at-the-market program, which lets a company sell new stock straight into the market a little at a time. Only $81.9 million of that, about 29%, bought bitcoin.

The largest slice, $188.3 million, went to buying back 1,887,464 shares of STRC, its variable-rate preferred stock. That works out to about $99.76 a share, Unchained calculated. Preferred stock gets its dividend paid before common shareholders see anything. STRC's rate is variable, and Executive Chairman Michael Saylor has said Strategy aims to keep its price between $99 and $100, Unchained reported.

The last $13.6 million went to "USD Cash," the company's general-purpose pot.

Where the stack stands

• Holdings: 850,364 BTC as of Nov. 8
• Total cost: $64.16 billion, including fees
• Value at $74,948 a coin: about $63.7 billion, roughly $430 million below cost
• USD Reserve for dividends and interest: $4.77 billion, after $21.1 million in preferred dividends last week

The filing reports no bitcoin sales. Strategy has $560.3 million left under its preferred buyback program.

In our opinion: for a company built to buy bitcoin, spending more than twice as much on its own preferred shares is the line in this filing that deserves the attention. Holders of the common stock are funding both moves, and the $4.77 billion reserve is what covers the preferred dividends while bitcoin sits under cost. The 1,036 new coins began their Strategy careers about $4,000 each under water, so next Monday's 8-K will show whether the buyback pace holds.