- Strategy purchased $2.54 billion in Bitcoin over the week ended April 19 — its largest single-week acquisition since November 2024 — bringing its total Bitcoin holdings to approximately $61 billion.
- The purchase was funded primarily through $2.18 billion in STRC perpetual preferred share sales, with the remainder from common share sales — a deliberate shift away from equity issuance as common shareholder dilution concerns have grown.
- STRC preferred shares carry an 11.5% annual dividend rate, meaning Strategy is taking on significant debt-like obligations to fund Bitcoin buys that generate no cash flow — a growing financial risk as Bitcoin’s premium to Strategy’s share price has evaporated.
- Strategy stock is down ~48% over the past year despite the Bitcoin rally, reflecting investor skepticism about the leveraged treasury model; the company also proposed shifting STRC to semi-monthly dividends to stabilize the preferred share price and reduce issuance discounts.
What Happened?
Strategy Inc. disclosed in an SEC filing Monday that it purchased $2.54 billion worth of Bitcoin in the seven days ended April 19 — its most aggressive buying week since November 2024. The purchase was financed primarily through $2.18 billion in sales of STRC, the company’s variable-rate perpetual preferred shares, with common share proceeds covering the remainder. Bitcoin briefly surged above $78,000 over the weekend — a two-month high — before settling back to around $75,300 on Monday. The rally has been the longest three-week winning streak for Bitcoin since July, driven in part by optimism over Middle East peace talks and renewed institutional appetite. Strategy also proposed switching STRC dividend payments from monthly to semi-monthly, a technical adjustment aimed at stabilizing the preferred shares’ market price so future issuances don’t require steep discounts.
Why It Matters?
Strategy’s $2.54 billion buy is both a market-moving signal and a window into the growing complexity — and risk — of its Bitcoin treasury model. When Michael Saylor invented the playbook in 2020, the logic was simple: issue equity at a premium to Bitcoin’s price, buy more Bitcoin, watch the premium expand. That virtuous cycle has broken down. Bitcoin is 11% lower than a year ago, Strategy stock is down 48%, and the gap between the two has closed — eliminating the easy arbitrage that once made equity issuance cheap. The pivot to preferred shares solves the dilution problem for common holders but introduces a new one: 11.5% annual dividend obligations on billions of dollars of securities backed by an asset that generates zero cash flow. If Bitcoin stalls or retreats, Strategy faces an increasingly heavy carry cost with no organic income to offset it.
What’s Next?
All eyes are on Bitcoin’s ability to hold above $75,000 and eventually breach $80,000 — the psychological level that would validate the current rally and potentially reignite the premium dynamic that Strategy’s model depends on. The semi-monthly dividend change for STRC is a signal that the company is actively managing the preferred share market to keep its financing machine running smoothly. Longer term, the central question remains whether retail buyers — Strategy’s primary market for its junk-bond-equivalent preferred securities — will continue absorbing new issuance at these yields, or whether appetite eventually cools and forces Strategy to slow its accumulation pace.
Source: Bloomberg
