Strategy selling hundreds of millions worth of bitcoin raises question about its capital-allocation playbook

Interestingly, after a series of buys and sales over the past few weeks, the company is left with a net increase of only 69 bitcoin despite deploying roughly $20 million in additional capital, a crypto trader, KALEO, said on X. Because the company sold coins below the prices it had recently paid, the implied average cost of those additional holdings exceeded $289,000 per bitcoin, KALEO added.

Strategy now holds 843,775 bitcoin purchased at an average price of $75,476, maintaining its position as the largest publicly traded corporate holder of the cryptocurrency.

Despite the losses, today’s move to sell millions of dollars’ worth of bitcoin will likely signal to investors that Strategy will go to whatever lengths necessary to protect its dividends on its high-yielding preferred stock, Stretch (STRC), whose dividend now stands at 12% after a recent 50 basis-point increase.

Indeed, while bitcoin and Strategy’s common stock, MSTR, are lower on Monday, STRC continues to rebound from last week’s low below $75, rising another 2.1% to just shy of $90.

The ‘strategy’

Given the zigzags in strategy over the past few weeks, the company’s near-term capital allocation has become harder for investors to predict. Assuming relatively stable prices for BTC, MSTR, and STRC, it’s probably safe to say that bitcoin buys are off the table for the foreseeable future.