Saylor says share buyback isn’t priority as Strategy builds $4.8 billion cash reserve
Strategy is prioritizing STRC, cash reserves, and its credit business over stock buybacks, Executive Chairman Michael Saylor said Monday.
Executive Chairman Michael Saylor of Strategy (MSTR) has stated that the company is not currently prioritizing a share buyback. Instead, MSTR could consider buying back its own shares if the stock becomes undervalued. The recent decline in MSTR's common shares, which has resulted in a 38% decline this year and a 73% year-over-year drop, has been largely attributed to bitcoin's (BTC) price drop from $64,276.16.
MSTR has been issuing common stock to fund additional bitcoin purchases, build cash reserves, pay dividends, and repurchase preferred stock. However, the company remains focused on its preferred stock business, especially STRC. CEO Phong Le defended the practice of selling new MSTR shares, arguing that it can be beneficial when the stock trades above its asset value, allowing the company to invest more in bitcoin.
The recent drop in STRC has prompted Strategy to maintain a substantial $4.8 billion cash reserve, providing flexibility for various investment and repayment options, including bitcoin, MSTR shares, or debt repayment. Saylor emphasized the importance of a long-term perspective for MSTR investors, ideally four years or more, as the company navigates potential challenging periods.
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