Strategy, which is the company with the most Bitcoin on its balance sheet, expects STRC shares to return to its nominal value of $ 100 for new purchases. The company plans to restart Bitcoin accumulation once this condition is met. Cryptocurrency markets follow Strategy’s positions closely, because the company has very large amounts of bitcoin and the steps the company will take are important for predictability in the market.
STRC condition for Bitcoin purchases
Strategy CEO Phong Le announced in an interview with Bloomberg on July 15 that he would return to Bitcoin purchases after STRC regained its nominal value. Le noted that increasing dollar reserves is an effective method to increase the amount of Bitcoin per share.
We will start accumulating Bitcoin again when STRC returns to its nominal value. At the same time, we will continue to strengthen our dollar reserves.
Creating dollar reserves large enough to cover dividend payments for the next two to three years has an important place in the company’s capital plan. According to Le, this buffer will provide the necessary financial basis to sustain the issuance of new preferred shares in the long term.
In recent weeks, Strategy has focused on preserving cash liquidity rather than Bitcoin purchases. While the company did not make any new purchases after June 22, it sold 3,588 Bitcoins between June 29 and July 5.
Strategy generated net proceeds of approximately $467 million from sales of common stock during the seven-day period between July 6 and July 12. This resource was one of the main items that increased the company’s dollar reserves to approximately 3 billion dollars.
Priority was given to balance sheet durability
TD Cowen analyst Lance Vitanza considers the latest statements to be one of the first signs that management is starting to implement the capital allocation plan it announced about two weeks ago.
Vitanza points out that the current approach focuses on strengthening the balance sheet rather than expanding Bitcoin holdings in the short term. The analyst does not consider the period in which Bitcoin was not purchased as a move away from the company’s capital plan.
