Strategy's perpetual buying plan collides with $1.76B dividend bill

Michael Saylor's perpetual Bitcoin accumulation plan is colliding with the arithmetic of a 12 percent perpetual preferred coupon.

Strategy sold 1,638 bitcoin at an average $63,957 last week, raising $104.7 million to fund STRC preferred dividends and share buybacks — the first sustained treasury sales since the company adopted its perpetual accumulation framework.

"When I say 'Never Sell Your Bitcoin,' I speak as one saver to another. I have never sold mine. Not one satoshi," Michael Saylor, executive chairman of Strategy, wrote on X on August 3. "Strategy is a public company, not my wallet."

The company still holds 842,138 bitcoin, acquired for $63.51 billion at an average $75,419 per coin. Its annual preferred dividend and interest bill stands at approximately $1.76 billion — $4.82 million a day — against a $4.0 billion USD reserve. STRC, the Variable Rate Series A Perpetual Stretch Preferred Stock, pays 12 percent annually, up from 9 percent at its July 2025 launch, and carries a $10.46 billion notional across roughly 104.6 million shares.

The sales are not distress — CEO Phong Le said on CNBC the company is "not a forced seller of bitcoin" — but a capital-allocation choice driven by a 30 percent equity discount. Strategy's common stock trades at roughly 0.68 times the value of its bitcoin holdings, making equity issuance more dilutive than selling the treasury. The question now is how long the perpetual buying plan can coexist with a 12 percent perpetual coupon.

The STRC coupon that forces the sales

STRC is a perpetual preferred with a $100 stated amount and a rate the board resets every 30 days. The prospectus states the company's intention is to adjust the rate to keep the stock trading near par — cutting it if STRC trades above $100, raising it if below. The rate has climbed from 9 percent at launch to 12 percent effective July 2026, and dividends are cumulative and paid semi-monthly in cash.

In June, Strategy partly de-linked the rate from the price. The 10-Q states management does not intend to recommend a change from 12 percent "until STRC Stock demonstrates sustained trading at or near its $100 stated amount." Instead of ratcheting the coupon higher, the company chose to defend the price through buybacks — which need cash. At a 30 percent equity discount, that cash is cheapest to raise by selling bitcoin.

Strategy repurchased 912,143 STRC shares for $81.2 million last week, about $89 per share against the $100 stated amount, retiring roughly $10.95 million a year of obligation. Another $893.8 million remains available under the repurchase program.

The mNAV math that makes selling rational

The financing decision runs through the discount. If Strategy issues $1 billion of stock at an mNAV of 0.68, it receives $1 billion of cash and hands new shareholders a claim on roughly $1.47 billion of bitcoin. Issuing equity destroys about 47 cents of bitcoin claim per dollar raised. Selling bitcoin converts the asset at 100 cents.

The market's reaction to the sale is telling. MSTR closed at $94.86 on August 3, up 1.7 percent, then rose a further 2.94 percent to $97.65 on August 4 — roughly 4.7 percent across two sessions after announcing it had sold bitcoin below cost. That is not how a tape reacts to distress.

Bitcoin traded at $64,082 on August 5, down about 50 percent from its all-time high last year. It has closed below Strategy's $75,419 average cost basis on 144 of 218 trading days in 2026, and every single day since May 27.

The sales are a slow bleed, not an unwind. At 27,465 bitcoin a year — the conversion of the $1.76 billion bill at current prices — it would take roughly 31 years to exhaust the treasury. The buying phase may be over, but the perpetual plan has been redefined: Strategy now buys bitcoin when the equity premium allows, and sells when the preferred coupon demands. The next weekly 8-K is due Monday, August 10.

This article is for informational purposes only and does not constitute investment advice.