Accumulating 840,000 Bitcoins Yet Early Redemption of $1.5 Billion Bonds

Between May 11 and 25, U.S. IT company Strategy Inc. (ticker: MSTR) repurchased in cash $1.38 billion of its 0% convertible senior notes due 2029—originally $1.5 billion par—at an approximately 8% discount (about KRW 1.8 trillion). This transaction reduced its outstanding convertibles from $8.2 billion to $6.7 billion. Simultaneously, it raised roughly $2 billion (about KRW 2.6 trillion) through issuance of its variable-rate preferred shares (STRC) and common stock, and deployed those proceeds to acquire an additional 24,869 bitcoins, increasing its total bitcoin holdings to 843,738, the company disclosed in a Form 8-K filed May 26.

Following this transaction, Strategy Inc. reports it has $15.5 billion par value of preferred shares and $6.7 billion of convertible debt outstanding, with U.S. dollar cash reserves of $871 million (approximately KRW 1.1 trillion). The company reaffirmed its prior position that, in the absence of retained earnings under U.S. federal tax law, distributions on STRC and similar preferred shares may be treated as a tax-free return of capital.

In a separate filing, Chief Executive Officer Le Phon disclosed that on May 22 he purchased a small number of STRC shares on the open market through an account registered in his child’s name. Director Jarod M. Patton exercised low-struck stock options at the end of May to acquire common shares, sold a substantial portion at prices between $145 and $160 in the market, and continues to hold approximately 28,000 shares outright.

Recent disclosures indicate that shareholders approved a proposal at the annual general meeting to split the record and payment dates for STRC dividends from once per month into twice per month, effective June 30. Correspondingly, both institutional and retail trading and holdings of STRC have been on the rise.

At the end of May, the company also disclosed selling a few dozen bitcoins—only a tiny fraction of its total—for the purpose of funding preferred-share dividend payments. This demonstrates that while Strategy maintains its large-scale bitcoin accumulation strategy, it engages in limited sales to manage cash flow.

Originally an enterprise analytics and business-intelligence software provider, Strategy Inc. has since 2020 adopted bitcoin as a principal financial asset. It is now known as a leading publicly traded firm holding over 840,000 bitcoins, and its securities—including MSTR common stock and STRC preferred shares—are widely perceived and traded as leveraged bitcoin investment vehicles.

Despite high interest rates and regulatory uncertainty, the company continues to fund bitcoin purchases through a repeating cycle of issuing convertible debt, preferred shares, and common stock, paired with early debt repayments. This approach is cited as a noteworthy example of how corporate capital-raising strategies are evolving through the use of digital assets.