Strategy Sells $2 Billion of Stock, Buys No Bitcoin and Creates a New $1.59 Billion Cash Pool

Strategy sold 18,261,118 shares of its common stock for net proceeds of $2.01 billion in the week ended Aug. 23 and did not buy a single bitcoin with the money, according to an 8-K filed Monday. The week coincided with bitcoin’s largest weekly dollar gain on record.

About $136.4 million funded repurchases of 1,431,212 STRC preferred shares, $300 million went into the company’s USD Reserve, taking it to $5.10 billion, and the remaining $1.59 billion established a new pool the company calls USD Cash. Bitcoin holdings were unchanged at 840,447 BTC, bought for $63.36 billion at an average of $75,385 a coin.

USD Cash matters because of what it is permitted to do. The USD Reserve remains restricted to preferred dividends and interest on debt, but Strategy said USD Cash may be deployed for general Bitcoin Treasury Company purposes including acquiring bitcoin, repurchasing common or preferred stock, retiring convertible notes, or topping up the reserve itself. The company framed the flexibility as a way to respond faster to dislocations in the markets for bitcoin or its own securities, which reads as a war chest for the next stress event rather than a change of thesis.

Some $516.6 million remains available under the digital credit securities repurchase program and $1 billion under the MSTR buyback. Strategy shares closed Monday over $122, up over 31% in August.

The restraint follows a rough stretch. Strategy overhauled its financing in late June, and in July announced it had sold $216 million of bitcoin, its largest disposal ever, to fund dividends and rebuild the reserve. The pressure traced to STRC, the variable-rate preferred that funds much of the buying and that fell far below par in June, forcing the company to pause the share sales at the center of Michael Saylor’s flywheel.

Related Listen: Strategy Sold More Bitcoin. Is This a Betrayal of the Bitcoin Ethos?

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