Strategy shifted its capital strategy this week, repurchasing $1.5 billion of its convertible debt for $1.38 billion in cash and saving $120 million instead of adding to its Bitcoin treasury.
"This week we bought bonds, not bitcoin. The ₿️itVac is charging,” Executive Chairman Michael Saylor said on X, framing the move as a temporary pause in preparation for future accumulation.
The buyback retires a significant portion of the company's 0% convertible senior notes due 2029 at a discount to their face value. The transaction was funded from existing cash reserves, with none of the company's 843,738 BTC holdings being sold, according to company statements. Strategy's Bitcoin treasury currently holds an unrealized profit of approximately $1.50 billion.
The move reduces the risk of future share dilution for MSTR stockholders and increases the amount of Bitcoin per share. It also strengthens the company's balance sheet by retiring debt at a discount, mitigating risks associated with put options on other notes that become active in June 2028 and providing more flexibility for future Bitcoin purchases.
The decision marks a significant evolution in Strategy's corporate strategy. The firm, known for pioneering corporate Bitcoin accumulation, is now actively managing its capital structure, functioning more like a macro carry trade vehicle. By issuing low-cost debt and equity, Strategy can opportunistically retire liabilities at a discount or park capital in yield-generating instruments like US Treasuries, creating a spread.
This debt retirement directly benefits shareholders by lowering the number of notes that could potentially convert into MSTR stock, thereby concentrating the ownership of the company's underlying Bitcoin assets. While gold advocate Peter Schiff has previously raised concerns about the sustainability of Strategy's leveraged model, this action is being viewed by many investors as a sign of prudent financial discipline rather than strain. The company is proactively de-risking its balance sheet ahead of a 2028 liquidity window on other debt instruments.
This article is for informational purposes only and does not constitute investment advice.
