Strategy, the largest corporate holder of bitcoin, executed its third purchase of October last week, acquiring 267 BTC for slightly more than $22 million. This transaction brings the company’s total holdings to 848,517 digital coins, valued at approximately $69.5 billion based on current market prices. The latest buy follows a previous week’s acquisition of 250 BTC for $22 million, resulting in total October spending of $73 million on bitcoin purchases.
In addition to its cryptocurrency accumulation, Strategy repurchased $193.1 million of its STRC preferred stock, as disclosed in a Monday filing. The company has been buying back these shares because they have traded below their $100 face value due to market volatility and index changes. Originally known as MicroStrategy, the software firm began purchasing bitcoin in August 2020 to generate better returns for shareholders. To date, it has spent around $64 billion on BTC, allowing investors to gain exposure to the leading cryptocurrency through its equity.
The company is also focusing on yield-generating products via its STRF, STRC, STRK, and STRD preferred shares. However, potential regulatory headwinds emerged after Morgan Stanley Capital International (MSCI) announced plans to define and classify non-operating companies as ineligible for inclusion in the MSCI Global Investable Market Indexes. If implemented, this move could remove Strategy from the index, potentially reducing institutional investor participation in its stock.
Strategy’s continued aggressive accumulation of bitcoin underscores its dual role as both a technology firm and a de facto asset management vehicle for cryptocurrency exposure. By leveraging its balance sheet to buy BTC while simultaneously repurchasing undervalued preferred stock, the company attempts to optimize shareholder value across two distinct financial instruments. This strategy relies heavily on the premise that bitcoin serves as a superior store of value compared to traditional cash reserves, a thesis that has driven significant capital allocation since 2020.
The impending MSCI decision regarding non-operating companies presents a structural risk to Strategy’s valuation model. As an entity increasingly defined by its treasury assets rather than operational software revenue, exclusion from major global indexes would likely trigger forced selling by passive institutional funds. This scenario highlights the fragility of the 'bitcoin treasury' business model when faced with traditional financial classification standards, potentially widening the gap between the company’s net asset value and its market price if institutional demand contracts.
