Bitcoin treasury firm Strategy will restart buying Bitcoin once its preferred shares, known as Stretch (STRC), recover to their $100 par value, CEO Phong Le said. The company has not purchased Bitcoin since late June and has instead focused on building its cash reserve, raising $467 million through a common-stock sale to lift its reserve to $3 billion. Le stated that the plan is to issue more preferred shares once the price recovers, which will allow the company to buy more Bitcoin and increase its U.S. dollar reserve.
Capital Plan
Issuing more preferred stock is a key part of Strategy’s capital plan, as it is “very accretive to our Bitcoin per share, which is accretive to our shareholders,” according to Le. The company’s STRC shares have traded below par since mid-May, currently changing hands around $89.
Market Impact
Le pushed back on concerns that Strategy is retreating as Bitcoin’s dominant buyer, pointing to its position as the largest identified holder with over 840,000 BTC. He noted that the firm’s recent sales of $216 million “did not move the market,” and that Bitcoin trades $30 billion to $40 billion daily.
Worst Case Scenario
The CEO stated that a worst-case scenario would be if Bitcoin’s price falls to around $8,000 to $10,000, at which point the company would need to consider the risk associated with its debt. Until then, Le said the company feels “very secure” about its balance sheet.
Based on reporting from crypto.news.
