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- Strategy has entered into an agreement to repurchase $1.5 billion of its 2029 convertible senior notes for an estimated $1.38 billion.
- The move represents the first major step in a multi-year campaign to “realize equity” and reduce the company’s massive $8.2 billion debt pile.
- To fund the buyback of securities due in 2029, the company explicitly included “selling Bitcoin” as an option in its filing.
strategy It indicated on Friday that it was taking major steps to reduce the amount of its convertible debt, and entered into an agreement to buy back $1.5 billion worth of bonds due in 2029.
the Bitcoin-Buying company said in Deposit It expects to pay approximately $1.38 billion to repay debt the company took on to expand its cryptocurrency cache in November 2024, representing a significant portion of the $8.2 billion the company has borrowed in recent years.
Co-Founder and CEO Michael Saylor Shown In February, over the next three to six years the company will seek to “settle” its convertible notes — which investors can trade in exchange for common stock if the shares exceed a certain threshold.
As the company, which controls $65 billion worth of bitcoin, increasingly relies on its major preferred stock, Stretch (STRC), to expand its bitcoin holdings, the company’s efforts to retire a portion of its convertible debt are in line with a broader push to reduce debt.
While Strategy’s Bitcoin holdings showed multibillion-dollar losses earlier this year — with the digital asset falling to a low of $62,850 in February — looming liabilities for their upcoming maturities have tested confidence in the company’s long-term sustainability. These questions have been exacerbated by the regular dividend payments the strategy has committed to through STRC.
The largest holder of Bitcoin shares traded at about $178 shortly after the opening bell on Friday, according to Bloomberg. Yahoo Finance. Year-to-date, the company’s stock price is up 18%, though it still trades well below its high of $457 last year.
In its filing, the strategy said it intends to fund the buybacks using available cash reserves, proceeds from a common stock market offering program, “and/or proceeds from the sale of bitcoin.”
Traders on Myriad, the proprietary prediction market Decryption Parent company Dastan, currently Expect 90% chance This strategy sells Bitcoin before the end of this year. A month ago, traders were anticipating only a 12% chance that the company would exploit its cryptocurrency cache.
Despite cultivating a buy-never-sell attitude toward Bitcoin for years, Saylor He said This month during the company’s first-quarter earnings call, he said, “We’ll probably sell some bitcoin to fund the dividend just to graft the market — just to send a message that we’ve done that.”
The statement was made in reference to STRC, which currently offers an annual dividend of 11.5% paid monthly. Since Strategy began offering the product to investors in July, STRC’s market cap has swelled to $8.4 billion, with issuances surging in recent months.
When Strategy repurchases bonds due in 2029, the company will have $1.5 billion of convertible debt outstanding from that tranche. Furthermore, the company has issued nearly $1 billion in notes that investors can force the company to buy back as early as September 2027.
The company’s efforts to pay down debt come as peers plan similar moves. On Thursday, Strive, which runs the ninth-largest bitcoin treasury,… Announce It canceled outstanding debt by buying back long-term bonds at fair value.
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