Strategy returns to bitcoin buys, adding $370 million of BTC last week

After a two-month hiatus, Strategy has recommenced its Bitcoin purchasing campaign, announcing on Monday the acquisition of $370 million worth of Bitcoin at an average price of approximately $80,300 per BTC. The company's shares surged nearly 3% following the news and were trading around $130. To finance the purchase, Strategy utilized a portion of the funds raised by selling newly issued MSTR shares, while the remainder covered dividends and share repurchases, contributing an additional $30 million to its cash reserves.

This latest buy-in occurs during a brief uptick in Bitcoin's value, which had been languishing in a bear market for ten months before surging more than 23% on August 21st, breaking the $79,000 mark for the first time since May. Bitcoin's recent rally has also restored the value of Strategy's holdings to above the amount initially paid, reversing a period of significant paper losses.

Despite its aggressive accumulation model, which had previously relied on share sales and borrowed funds, Strategy has faced financial strain during the market decline. Consequently, it shifted from its previous stance of never selling Bitcoin. In June, when Bitcoin plummeted by 53% from its all-time high, the company sold some of its holdings to meet financial obligations.

Throughout the summer, it repeated the process on three further occasions, resulting in overall sales of approximately $544 million. This round of purchases, however, diverges from debt financing, as Strategy has distanced itself from further borrowing. Shareholder discontent over the strategy's aggressive buying, particularly amid a 60% decline in MSTR shares over the past year, prompted the company to explore alternative funding methods.

In July, Strategy introduced STRC, a dividend-paying share class aimed at attracting income-focused investors and providing a new cash source for Bitcoin purchases. STRC investors receive regular payouts, unlike MSTR shareholders, who primarily benefit from stock price appreciation. However, the company's cash reserves remain essential for fulfilling STRC payments, prompting Strategy to focus on rebuilding its cash reserves to ensure dividend payments even in weak Bitcoin markets.