Strategy Inc. has repurchased approximately 9.96 million shares of its Stretch (STRC) preferred security for roughly $950 million since July 20, a move that has helped lift the stock from lows near $70 to nearly its $100 face value. This aggressive self-trading raises a critical question for the market: can the company's Bitcoin financing model function without the issuer acting as its primary buyer?
Chairman Michael Saylor designed STRC to expand Strategy's capital-raising capacity beyond its volatile common stock, MSTR. The goal was to establish "digital credit" as a durable funding source rather than a tool that only works during peaks of market enthusiasm. That premise was tested in June when Strategy sold a small amount of Bitcoin, breaking with Saylor's long-standing advice to never divest the asset. The subsequent selloff pushed STRC prices down to almost $70, challenging the narrative that the preferred security offers a steadier path to leveraged Bitcoin exposure.
Bloomberg data compiled for this report indicates that Strategy's buybacks accounted for about 18% of all STRC shares traded between July 20 and Sept. 13. In the most recent reported week, the company bought the equivalent of almost 28% of total trading volume. Jay Hatfield, chief executive officer of Infrastructure Capital Advisors, noted that there are "no significant institutional, incremental institutional buyers" for the security. His firm purchased STRC near the June lows and sold most of its position in the high nineties, suggesting that retail and speculative interest, rather than institutional accumulation, is driving current prices.
The mechanics of these repurchases complicate the story of STRC's recovery. Roughly $765 million of the buybacks, or about 80% of the total, were funded by sales of MSTR common stock or a cash pool built from those proceeds. Another $161 million came from Bitcoin sales. This creates a circular dynamic: a financing structure built to reduce dilution of common shares is now relying on those same common shares to support the preferred instrument. MSTR has fallen approximately 60% over the past year.
Alexander Blume, founder and CEO of Two Prime, described the current situation as a reversal of the dynamics that previously powered Strategy's growth. "Now they sell MSTR to raise cash to buy STRC rather than Bitcoin," Blume said. He argued that for investors who bought MSTR for amplified Bitcoin exposure, this strategy is not accretive in the near term.
Rajiv Sawhney, head of international portfolio management at Wave Digital Assets, emphasized that STRC only functions as a funding tool if it trades at par. "At $71, it's worthless as a funding tool and actively toxic," Sawhney said. He noted that buying back shares at $85 to $90 is an attractive balance-sheet trade because it retires a $100 obligation carrying a $12 annual dividend for less than its stated value. This effectively allows Strategy to reset its coupon and lower future funding costs if the price stabilizes.
Strategy has doubled its authorization for repurchases of digital-credit securities to $2 billion and strengthened its liquidity cushion. However, Blume stated there is "no objective reason STRC will trade at $100" without external demand. Hatfield added that the institutional preferred market is "more or less stuffed full" of the security, meaning recovery may depend on the return of retail traders who have recently shifted attention to AI and tokenized assets. If STRC cannot stand on its own, Strategy's financing flywheel remains dependent on selling common stock to defend the preferred, a cycle that differs sharply from its original design.