Strategy's latest disclosure shows that the company is currently prioritizing liquidity reserves over resuming Bitcoin accumulation. As of July 26, its Bitcoin holdings remained unchanged at 843,775, while its cash reserves increased to $3.75 billion.
The company disclosed that it neither purchased any new Bitcoin nor reduced its holdings between July 20 and July 26. This indicates that its treasury strategy continues its previous adjustment phase.
The sale of common stock brought in $544.5 million.
The company disclosed that its cash reserves increased by $525 million in this round, primarily from the sale of common stock, with related financing amounting to $544.5 million. Based on the company's current figures, this cash can roughly cover preferred stock dividend payments for approximately 2.1 years.
However, this coverage period is a calculation based on the company's own reserve policy and does not guarantee payment in all market conditions. The document also does not show that this cash was separately transferred to a legally independent dedicated account.
- Cash reserves amounted to $3.75 billion.
- Common stock sale financing of $544.5 million
- The preferred stock dividend coverage period is approximately 2.1 years.
Bitcoin holdings remain below June highs
Strategy currently holds 843,775 bitcoins, 3,588 fewer than the 847,363 it held at the end of June. The company sold these bitcoins between June 29 and July 5, raising approximately $216 million.
At that time, the company adopted a new funding arrangement that allowed for the sale of a portion of its Bitcoin under certain circumstances to cover dividend, interest, and reserve needs. This also marked a change from its long-standing, one-way accumulation model. Subsequently, the company ceased further Bitcoin purchases and redirected more of its new common stock financing towards cash reserves.
According to the disclosed figures, the total cost of this batch of Bitcoins was $63.69 billion, including transaction fees and related expenses, with an average purchase price of approximately $75,476 per coin.
This week, STRC repurchased $25 million.
The latest filing also shows that while the company expanded its cash reserves, it repurchased $25 million worth of STRC, but did not resume Bitcoin purchases. Overall, this update emphasizes short-term solvency rather than continuing to expand its Bitcoin holdings.
One concern previously raised by the market was whether the company would need to sell Bitcoin to pay preferred stock dividends if its cash reserves were insufficient. JPMorgan Chase had previously stated that establishing a two- to three-year cash coverage period could alleviate these concerns. Strategy's currently disclosed 2.1-year period falls within this range.
Additional information:The company has not yet stated when it will resume buying Bitcoin. The latest weekly disclosure shows that the company neither bought nor sold BTC between July 20th and July 26th.
