Strategy Repurchases $1.5 Billion of 2029 Convertibles, Makes No New Bitcoin Buy Disclosure Last Week
Summary
- Strategy said it repurchased $1.5 billion in convertible notes due in 2029 at about an 8%% discount, reducing its outstanding convertible note balance to $6.7 billion.
- Strategy said it bought 24,869 BTC with proceeds raised through additional issuance of $2 billion in STRC and $84 million in MSTR, bringing its total Bitcoin holdings to 843,738 BTC.
- Strategy said it has posted BTC Yield of 13.3%%, BTC Gain of 89,378 BTC and BTC $ Gain of $6.8 billion so far this year, as it continues to expand its Bitcoin holdings while adjusting its capital structure.
Forecast Trend Report by Period
Strategy completed a $1.5 billion repurchase of convertible notes due in 2029. After its previous large Bitcoin purchase, the company did not separately disclose any additional buying last week, signaling a focus on capital structure management.
In a press release on May 26, Strategy detailed capital markets activity and Bitcoin transactions conducted from May 11 through May 25. The transactions included the repurchase of $1.5 billion of 0% convertible senior notes due 2029, the use of cash reserves, and issuance under financing programs tied to common stock and preferred stock.
Strategy repurchased $1.5 billion in principal amount of its 2029 convertible notes for about $1.38 billion in cash, or roughly an 8% discount to par. As a result, its outstanding convertible note balance fell to $6.7 billion from $8.2 billion.
The company said the debt repurchase generated BTC Yield of 0.7%, BTC Gain of 4,391 BTC and BTC $ Gain of $333 million. BTC Yield is Strategy's own performance metric measuring the increase in Bitcoin holdings on a per-common-share basis.
Strategy also issued an additional $2 billion of variable-rate Series A perpetual Stretch preferred stock, or STRC, and $84 million of Class A common stock, or MSTR. It said the proceeds were used to buy 24,869 BTC. That purchase, however, was the previously disclosed acquisition made between May 11 and May 17, and the company did not separately mention whether it bought additional Bitcoin between May 18 and May 25.
After the transactions closed, Strategy held 843,738 BTC as of May 25. Its Bitcoin holdings per common share stood at 220,900 satoshis. Outstanding convertible notes totaled $6.7 billion, while the notional balance of preferred stock stood at $15.5 billion.
Dollar reserves were $871 million. Strategy said it plans to gradually rebuild those reserves depending on market conditions. The reserves are managed as liquidity to support preferred dividend payments and interest payments on debt.
For the year to date, Strategy posted BTC Yield of 13.3%, BTC Gain of 89,378 BTC and BTC $ Gain of $6.8 billion. The figures show it is continuing to expand its Bitcoin holdings while adjusting its capital structure.
Michael Saylor, Strategy's founder and executive chairman, said the transaction demonstrated the optionality built into the company's capital structure and its dynamic multivariable capital allocation model. He added that Strategy has the flexibility to fund strategic transactions using cash, digital equity, digital credit and digital capital.
Chief Executive Officer Phong Le said he told investors during the company's first-quarter earnings announcement that Strategy would proactively manage its convertible debt and use every available capital management tool, including disciplined Bitcoin sales. This transaction reflects that approach, he said.
Chief Financial Officer Andrew Kang said the 2029 convertible note repurchase was positive for investors from both equity and credit perspectives and underscored the company's continued focus on debt management. He added that Strategy remains committed to maintaining a strong cash reserve to support the credit profile of its digital credit securities.
