Strategy is giving priority to its preferred stock operations, cash reserves and credit business rather than buying back MSTR shares, Executive Chairman Michael Saylor said Monday.
Saylor said Strategy could repurchase its common stock if the shares become deeply undervalued, but emphasized that buybacks are not currently at the top of the company’s agenda.
His comments came during a Monday Q&A following a prolonged decline in Strategy’s common stock. MSTR is down roughly 38% this year and about 73% over the past 12 months. The weakness has largely reflected Bitcoin’s decline, along with Strategy’s ongoing issuance of common shares to finance BTC purchases, strengthen its cash position, fund dividends and repurchase preferred shares.
According to Saylor, Strategy would consider buying back MSTR if the stock were trading at a substantial discount to the value of its underlying assets.
For now, the company is concentrating on its preferred stock business, particularly STRC.
Le Defends Strategy’s Stock Sales
Strategy CEO Phong Le defended the company’s continued issuance of MSTR shares despite concerns that new shares could dilute existing investors.
Le said issuing additional stock can make sense when MSTR trades above the value of the assets supporting each share. If Strategy raises capital at such a premium and uses the proceeds to purchase Bitcoin, the amount of BTC backing each MSTR share can rise.
The recent decline in STRC has also prompted the company to place greater emphasis on maintaining liquidity.
Le said the experience highlighted the importance of having enough cash available to meet STRC dividend commitments. Strategy now holds about $4.8 billion in U.S. dollars.
Saylor said that reserve gives the company more flexibility to decide how to deploy capital, including buying Bitcoin, repurchasing MSTR or preferred shares and reducing debt.
He also stressed that Strategy needs flexibility to sell Bitcoin when necessary rather than treating its holdings as one-way purchases.
“We have to be able to sell bitcoin as well as buy bitcoin,” Saylor said.
Bitcoin’s Price Could Determine Future Purchases
Saylor said Strategy may adjust its Bitcoin-buying strategy depending on BTC’s position relative to its long-term average.
When Bitcoin trades significantly above its 200-week average, the company could choose to retain more of the cash it raises instead of immediately converting it into BTC. If Bitcoin approaches or falls below that long-term benchmark, Strategy could view the price as more attractive for additional purchases.
STRC serves a different purpose from MSTR. Rather than relying on share-price appreciation, STRC is structured primarily as an income-generating preferred stock with a focus on dividends and relatively stable pricing.
Saylor said Strategy aims to keep STRC trading around $100. The company could issue additional shares when the price moves above that level and potentially repurchase shares if they fall below it.
He described that stability and predictability as an important part of STRC’s investment proposition.
Strategy Won’t Buy Traditional Businesses for Cash Flow
Saylor also dismissed the possibility of Strategy acquiring profitable operating businesses simply to generate additional cash.
He argued that such acquisitions would add complexity to the company and make it more difficult for investors to understand and value.
For MSTR investors, Saylor recommended maintaining a minimum investment horizon of four years, while saying seven to 10 years would be preferable.
Acknowledging the frustration caused by the stock’s recent performance, Saylor said investors should be prepared for difficult periods as Strategy continues to pursue its long-term Bitcoin treasury strategy.
