Bitcoin sales and $4 billion cash reserve fuel STRC’s recovery toward par value

Strategy’s (MSTR) perpetual preferred stock, Stretch (STRC), has risen more than 30% from its June low. It is currently trading around $94, after gaining another 1% on Wednesday.

STRC bottomed in late June around $71 as bitcoin fell below $60,000. Since then, Strategy has sold 5,226 BTC for $321 million across three separate transactions, reducing its bitcoin holdings from 847,363 BTC to approximately 842,137 BTC. The sales were intended, in part, to demonstrate that the company can use bitcoin to meet its dividend obligations, rather than treating it as an idle asset.

Strategy has also repurchased $106 million of STRC as it seeks to return the preferred stock to its $100 stated value.

In addition, the company increased its U.S. dollar reserve by another $250 million on Monday, bringing the total to $4 billion. This provides approximately 2.3 years of coverage for dividend obligations on its preferred securities. Meanwhile, Strategy maintained STRC’s annualized dividend rate at 12%.

As for bitcoin, the price has at least stopped falling, stabilizing above $60,000 for several weeks in a row.