MSTR Stock Slides After Strategy Ends Four-Week Pause With $104M Bitcoin Sale

• Strategy said proceeds from the sale were used to fund preferred stock dividends and repurchase STRC shares.
• The company also raised $290.6 million through its at-the-market stock offering, with most of the proceeds added to its USD Reserve.
• MSTR shares have underperformed Bitcoin’s price year-to-date.

Michael Saylor-backed Strategy (MSTR) resumed selling Bitcoin for the first time in weeks, ending a pause that had stretched across the past four weeks, slashing the company’s crypto stash down to 842,138 BTC.

In an 8-K filing with the Securities and Exchange Commission (SEC), Strategy disclosed that it had sold 1,638 BTC over the past week, at an aggregate sale price of $104.73 million, an average sale price of $63,957 per coin. 

The average price of its existing stash remains at around $75,419 per coin, well above the price at which this week's coins were sold, a gap of more than $11,000 per Bitcoin.

Strategy first sold Bitcoin in June, reducing its BTC stash by only 32 BTC, worth around $2.5 million. It later sold another 3,588 Bitcoin in the first week of July, worth around $216 million. Since then, the company has neither sold nor bought any Bitcoin. 

Retail Traders Question MSTR’s Bitcoin Selling Pivot

MSTR stock slid as much as 1.7% in pre-market trade. On Stocktwits, retail sentiment around the company remained in ‘bearish’ territory over the past day. Investors on the platforms expressed frustration with Saylor’s strategy.

https://www.stocktwits.com/CharlesIsKing/message/660717197

The dip in MSTR stock came amid weakness in Bitcoin (BTC). BTC’s price fell over 1% in the last 24 hours, and was the top trending ticker among cryptocurrencies on Stocktwits. Retail sentiment around the coin remained in ‘bearish’ territory over the past day. 

MSTR stock losses have outpaced the drawdown in Bitcoin’s price year-to-date since mid-June. The shares have fallen nearly 40% this year, while Bitcoin’s price is down around 30%. 

MSTR’s Bitcoin Sale Funds Dividends, Share Repurchases

Strategy said $52.4 million of the Bitcoin sale proceeds was used to fund dividend payments on its preferred stock, while another $52.3 million financed repurchases of STRC shares under the company's Digital Credit Securities Repurchase Program.

The company also continued raising capital through its at-the-market (ATM) equity program, selling more than 3 million shares of MSTR Class A stock and generating $290.6 million in net proceeds. Around $250.0 million was used to increase the company's USD Reserve, $28.9 million was used for STRC repurchases, and $11.7 million was added to Strategy's general cash balance. 

Strategy bought back 912,143 shares of STRC stock for $81.2 million, while making no repurchases of its other preferred lines or common stock. Strategy's USD Reserve, the fund used to cover preferred dividend payments and debt interest, stood at $4.0 billion.

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