Strategy, one of the companies that holds the most Bitcoin in the cryptocurrency industry, took action to buy back its zero-interest bonds due in 2029 with a nominal value of approximately $ 1.5 billion. In the application made to the US Securities and Exchange Commission, it was stated that the company would buy back its bonds through private negotiations by paying approximately $1.38 billion in cash. The transaction is expected to be completed around May 19 and the repurchased bonds will be cancelled.
Selling Bitcoin is Among the Options
Strategy announced that it could use multiple sources to finance this buyback, such as cash on hand, share sales through the market, or Bitcoin sales. Especially the possibility of Bitcoin sales attracted attention in the market. Strategy is the institution with the most BTC accumulation among publicly traded companies worldwide. According to the company’s current balance sheets, it has approximately 818,869 Bitcoins and is worth over $65 billion according to the latest data.
Michael Saylor, Chairman of the Company’s Board of Directors, stated in his past statements that they are open to benefiting from Bitcoin liquidity, but will continue to remain net Bitcoin buyers in the long term.
The fact that Strategy could potentially take the step of paying off debt by selling Bitcoin reflects that accumulated BTC functions as an important financial tool.
CryptoAppsy According to the data, while the amount of Bitcoin reached 818,869 at the time the news was written, the average unit cost of the company’s total BTC purchase was reported as 75,537 dollars. The total amount paid for the company’s Bitcoin accumulation reached 61.81 billion dollars.
Debt Restructuring and STRC Share Mobility
The company’s debt repurchase strategy is seen as part of planned steps to strengthen its overall capital structure. Buying back bonds due in 2029 at a discount of approximately 8% requires a significant cash outflow in the short term while reducing future liabilities.
During this period, Strategy’s Strategic Variable Rate Series A Continuous Preferred Share (STRC) also stood out with its record trading volume. STRC surpassed its previous record with daily trading volume of $1.53 billion last Thursday. STRC shares provide an annual dividend yield of 11.5%, and the market value of this asset has reached $8.5 billion.
Share activity has been particularly intense ahead of the dividend date. Shareholders have also started the voting process, as required by law, on whether the monthly dividends paid should change semi-monthly. Voting on this amendment is expected to end on June 8; If accepted, the first payments will occur on July 15.
Intraday Volatility in MSTR Shares
Share prices of Strategy, which is traded on the stock exchange, fell 5.27% to $177.11 on Friday, following news about the buyback and possible Bitcoin sale. After the stock opened at $182.11 during the session, $182.23 was recorded as the highest level and $174.34 was recorded as the lowest level.
The company also recently increased its total BTC portfolio by purchasing another 535 Bitcoins; $43 million was paid for this purchase, and the average cost per unit was $80,340. An additional resource of $42.9 million was obtained from the share sales made between May 4-10. It is stated that such equity capital increases may raise share dilution concerns among investors while providing funds for Bitcoin purchases.
In the first quarter of the year, Strategy announced a large net loss. Fluctuations caused by fair value accounting in the Bitcoin portfolio stood out as the source of this loss. The company noted that periodically high income or losses may be recorded due to the change in the total value of Bitcoin assets on its balance sheet.
