MicroStrategy Sells 1,638 BTC for $104.7M to Strengthen Balance Sheet

Strategy sold 1,638 Bitcoin for $104.7 million late last month and redirected much of the proceeds to shore up its balance sheet and support its preferred stock, according to an SEC filing and executive updates. Key details - The Bitcoin were sold between July 27 and Sunday at an average price of $63,957 per BTC, generating $104.7 million. - From that sale, $52.4 million funded dividends on STRC perpetual preferred stock and $52.3 million went to repurchasing STRC shares. - The company’s Bitcoin reserve now stands at 842,138 BTC, acquired at a combined cost of roughly $63.5 billion. - During the same period Strategy also sold $290.6 million of MSTR common shares. Of that, $250 million was added to the U.S. dollar reserve, $28.9 million was used for more STRC repurchases, and $11.7 million boosted cash on hand. Executive chairman Michael Saylor posted on X that the company repurchased $81.2 million of STRC stock during the period and extended its U.S. dollar funding runway by 57 days to about 2.3 years. He said the company now holds ₿842,138 in its BTC reserve and about $4.0 billion in its USD reserve. Why Strategy is selling Bitcoin now The sales follow a new capital framework unveiled at the end of June that explicitly permits Bitcoin disposals to support preferred-stock dividends, debt servicing, approved share repurchases and the company’s USD reserve. Strategy had already sold 3,588 BTC for roughly $216 million on July 6 and 32 BTC in early June — its first Bitcoin disposals since a 2022 tax-related sale. Management signaled a shift in capital allocation during the July 31 Q2 earnings call: Strategy will no longer funnel every available dollar straight into Bitcoin. CEO Phong Le said the company will pause further Bitcoin purchases while STRC trades below its $100 stated value, and the board has emphasized building cash buffers first. Preferred stock dynamics and liquidity moves - STRC is a key fundraising vehicle for Strategy; its market price matters for future capital raises. As of Monday pre-market, STRC traded near $89.40 — about 10.6% below par — while MSTR shares were down modestly. - Strategy kept STRC’s annual dividend rate at 12% for August despite the stock trading below $100. A June 29 policy change means dividend decisions now weigh market price, competing yields, Bitcoin volatility, credit spreads and cash reserve coverage rather than automatic increases whenever STRC trades under par. - Management has leaned more on repurchasing STRC at discounts than repeatedly hiking dividends; filings show roughly $25 million in STRC repurchases between July 20–26 and nearly $1 billion still available under the repurchase authorization. Context and market reaction Strategy’s recent actions — selling some BTC, raising cash via MSTR sales, beefing up a ~ $4 billion USD reserve, and buying back discounted STRC — are meant to strengthen liquidity and preserve financing flexibility. Executives say restoring STRC closer to its $100 stated value is a priority before resuming more aggressive Bitcoin accumulation. The moves follow outside calls from market observers urging the company to pause purchases and rebuild cash cushions. CryptoQuant founder Ki Young Ju tweeted that Strategy should “pause Bitcoin purchases, rebuild cash reserves, and adopt a systematic framework” after warning the company’s dividend coverage had tightened. Financials and analyst views Strategy posted an $8.22 billion net loss in Q2, driven largely by an $8.32 billion unrealized accounting loss on its Bitcoin holdings under fair-value rules. Management reiterated that the accounting loss doesn’t alter its long-term Bitcoin strategy. Benchmark and H.C. Wainwright kept buy ratings after the quarter, though Benchmark trimmed its price target — both firms noted that growing the cash reserve, repurchasing preferred stock, and shoring up financing could help future capital-raising, while also warning Strategy’s outlook remains closely tied to Bitcoin prices and investor appetite for STRC. Bottom line Strategy is temporarily shrinking its Bitcoin exposure to shore up preferred dividends, buy back discounted STRC, and build a larger dollar reserve — a deliberate pivot toward liquidity and financing stability that the company says will better position it to raise capital and potentially support future Bitcoin purchases once STRC recovers and funding flexibility improves.