MicroStrategy Pivots Toward Common Stock for Bitcoin Buys
MicroStrategy has quietly overhauled its funding playbook for Bitcoin acquisitions. After a period of market instability, the company has abandoned its preferred stock—known as Stretch (STRC)—as a primary vehicle for financing digital asset purchases. Instead, the firm is leaning heavily on class A common stock (MSTR) to fuel its treasury.
A Fragile Recovery for STRC
The STRC instrument has clawed back from a significant slump. After dipping to approximately $75 earlier this year, the stock has stabilized, recently trading near $99.40.
Peter Schiff, a vocal Bitcoin critic, weighed in on his October 2 podcast, suggesting that the rebound was fueled by the company’s weekly buyback program and a rally in Bitcoin’s price that likely forced short covering. Schiff characterized the recovery as surprising, especially given that CEO Phong Le previously blamed the stock’s decline on “unexpected leverage.”
The End of the STRC Funding Era
Regulatory filings reveal a sharp break in financing habits. MicroStrategy last utilized its at-the-market program to sell STRC between May 11 and 17, a window that generated approximately $1.95 billion. The company has not sold a single STRC share since.
In its place, MSTR has become the engine for accumulation. In late August, the company used MSTR sales to purchase 4,603 BTC. This momentum carried into late September, when the firm added another 1,665 BTC to its holdings. Between September 21 and 27, the company also directed $103.5 million in MSTR proceeds toward repurchasing its own STRC shares.
Saylor Cites Cooling STRC Volatility as Sign of Health
Executive Chairman Michael Saylor has pointed to the cooling volatility of STRC as a sign of institutional health. In an October 3 post on X, Saylor noted that STRC’s 30-day historical volatility hit 9%, edging out the 10% reading for the SPDR S&P 500 ETF (SPY).
To back its commitments, the company keeps a $5.02 billion USD reserve specifically to cover preferred dividends and debt interest. However, critics like Schiff argue that the shift away from STRC suggests the company’s ability to use the instrument as a primary capital-raising tool has been effectively curtailed.
Uncertainty in Capital Allocation
Whether MicroStrategy will stick to common stock or attempt to reopen the STRC issuance channel remains an open question.
What Is the Purpose of MicroStrategy's Reserve?
What is the purpose of MicroStrategy’s $5.02 billion USD reserve?
The company maintains this cash pool specifically to fulfill its obligations regarding preferred dividends and interest payments on its debt.
How does STRC’s volatility compare to traditional market benchmarks?
As of October 3, Michael Saylor reported that STRC’s 30-day historical volatility was 9%, which is lower than the 10% volatility measured for the SPDR S&P 500 ETF (SPY).
When did MicroStrategy last sell STRC shares to raise capital?
The company’s most recent sale of STRC through its at-the-market program occurred between May 11 and 17, during which it raised approximately $1.95 billion.
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