Strategy MSTR (formerly known as Microstrategy) shares climbed on Monday after the company disclosed it had not purchased any Bitcoin for the fifth consecutive week, instead continuing to build its cash reserves and repurchase preferred shares under its revised capital allocation strategy.
The company said in a filing that it neither bought nor sold Bitcoin during the week ended July 26, leaving its holdings unchanged at 843,775 BTC.
Strategy acquired its Bitcoin treasury at an average purchase price of $75,476 per coin.
Despite the pause in acquisitions, the stock gained as much as 6.8% to $97.88 on Monday, snapping a three-day losing streak.
The move came as Bitcoin also recovered, rising 0.17% over the past 24 hours to $64,576, according to CoinDesk.
The company has not added to its Bitcoin holdings since purchasing 520 BTC on June 22, marking its longest buying pause since adopting its Bitcoin treasury strategy.
Strategy builds cash reserve through share sales
Rather than purchasing more Bitcoin, Strategy continued raising capital through equity issuance.
The company sold approximately 5 million common shares during the latest reporting period, generating $544.5 million.
Although Strategy expanded its fundraising options by introducing preferred stock last year, the latest filing suggests common equity remains a significant source of financing.
The filing also showed the company increased its US dollar reserve by roughly $525 million to $3.75 billion.
According to Strategy, the reserve is intended to meet dividend and interest obligations and now covers more than two years of its current annual commitments of about $1.759 billion.
Separately, Strategy repurchased 288,930 STRC preferred shares during the preceding six-day period.
The company has $975 million remaining under its authorization to repurchase preferred shares and another $1 billion available for common stock buybacks.
Chairman Michael Saylor reiterated the company’s approach in a post on X.
“Our objective is for STRC to trade near $100 with high liquidity, low volatility, and healthy, sustainable independent demand. We will not issue below $100.”
Strategy previously said it would opportunistically buy and sell its own shares rather than issuing them continuously.
The company has also authorized up to $1.25 billion in potential Bitcoin sales to strengthen its US dollar reserve if needed, while noting that share repurchases will be funded outside that reserve.
Analysts see disciplined capital allocation
Benchmark Equity Research maintained its Buy rating and $570 price target on Strategy, arguing that the company’s decision to prioritize liquidity over additional Bitcoin purchases reflects disciplined capital management rather than any change in its long-term strategy.
The brokerage highlighted the increase in cash reserves and continued securities repurchases.
Benchmark analyst Mark Palmer said the larger reserve provides greater flexibility to fund preferred dividend obligations while preserving the company’s ability to resume Bitcoin purchases when market conditions improve.
“The company has made clear that it remains a long-term buyer of bitcoin while strengthening its balance sheet,” Palmer wrote in a note to clients on Monday.
The brokerage added that Strategy’s recently introduced Digital Credit Capital Framework allows management to allocate capital among Bitcoin purchases, reserve building and share repurchases without abandoning its long-term treasury strategy.
Palmer also addressed concerns surrounding the company’s preferred securities.
“Strategy’s increase in its USD reserve directly addressed the concern that has dominated the bear case on the company’s perpetual preferred stack, namely that dividend and interest coverage depends on continuous access to equity markets.”
“By pre-funding more than two years of obligations in dollars, Strategy has reduced the near-term sensitivity of those payments to the market’s willingness to absorb new share issuance at any given moment.”
Strategy’s Bitcoin treasury is currently valued at roughly $54 billion and represents more than 4% of Bitcoin’s maximum supply of 21 million coins.
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