Strategy’s Preferred Stock Nears Par Value After Buybacks

Strategy’s Preferred Stock Nears Par Value After Buybacks

• BTC
• MSTR

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The preferred stock of Strategy (NASDAQ: $MSTR) is back near its par value of $100 U.S. per share following aggressive buybacks by the serial cryptocurrency acquirer.

The preferred stock, known as Stretch (NASDAQ: $STRC), finished trading at $97.07 U.S. per share on Sept. 17. The share price had been under $75 U.S. at the end of June this year.

Strategy has said that it is focused on getting the preferred stock back to its par value of $100 U.S.

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A stock's par value refers to the minimum price per share set by a corporation. It has no relation to the market price.

In an effort to regain the par value of STRC stock, Strategy repurchased nearly 9.96 million preferred shares at a cost of $950.8 million U.S. at the end of July.

More recently, Strategy bought another 1,420,467 shares of the preferred stock between Sept. 8 and Sept. 13 at a cost of $139.3 million U.S.

In all, Strategy has bought back its preferred stock on eight occasions since the end of June.

The preferred stock has a 12% annualized dividend yield and pays a distribution to stockholders of $0.50 U.S. per share twice a month.

Some investors criticize Strategy's focus on its preferred stock and maintaining a par value, arguing it has taken the company's focus away from accumulating Bitcoin (CRYPTO: $BTC).

Strategy has held off making Bitcoin purchases during the times when it is buying back its preferred stock and even sold some BTC in recent months at a loss to raise cash.

MSTR stock has declined 62% over the last 12 months to trade at $126.18 U.S. per share.