Strategy Prioritizes Cash Reserves Over Buybacks as Saylor Eyes $4.8B War Chest

Strategy is putting its preferred stock business, cash holdings and credit operations ahead of MSTR share repurchases, Executive Chairman Michael Saylor said Monday.

Saylor said the company could buy back its common stock if MSTR becomes deeply undervalued, but emphasized that repurchases are not currently a key priority.

His comments came during a Monday Q&A as Strategy’s common shares face continued pressure. MSTR has dropped about 38% so far this year and roughly 73% over the past 12 months. The decline has coincided with Bitcoin’s weakness and Strategy’s ongoing issuance of common shares to finance BTC purchases, strengthen its cash position, pay dividends and repurchase preferred stock.

Saylor said Strategy would be more likely to consider a buyback if MSTR traded at a significant discount to its net asset value.

For now, the company is concentrating on its preferred stock operations, with STRC receiving particular attention.

Strategy Defends MSTR Share Issuance

CEO Phong Le defended Strategy’s continued sale of MSTR shares despite concerns over potential dilution.

Le said issuing new shares can create value when MSTR trades above the value of the assets backing each share. In that situation, Strategy can raise capital and use the proceeds to acquire Bitcoin, potentially increasing the amount of BTC attributable to each MSTR share.

The recent weakness in STRC has also changed the company’s approach to liquidity management.

Le said the decline highlighted the importance of maintaining enough cash to meet STRC dividend obligations. Strategy currently has about $4.8 billion in U.S. dollar reserves.

Saylor said the cash cushion provides greater flexibility, allowing Strategy to purchase Bitcoin, repurchase MSTR or preferred shares, or reduce debt depending on market conditions.

He also stressed that Strategy needs the ability to sell Bitcoin as well as accumulate it.

Bitcoin’s Valuation Could Guide Treasury Decisions

Saylor said Strategy may adjust its Bitcoin purchases based on how BTC compares with its long-term 200-week average.

If Bitcoin trades substantially above that benchmark, the company could retain more of the cash it raises rather than immediately converting it into BTC. If BTC approaches or falls below the long-term average, Strategy could see greater value in deploying capital into Bitcoin.

STRC is designed differently from MSTR. The preferred stock focuses on generating dividend income and maintaining relatively stable pricing rather than relying on significant share-price gains.

Saylor said Strategy wants STRC to remain around the $100 mark. The company could issue additional shares when STRC trades above $100 and potentially support the price through repurchases when it falls below that level.

He said that predictability is central to the preferred stock’s role within Strategy’s capital structure.

Strategy Rules Out Buying Traditional Companies

Saylor also dismissed the possibility of acquiring profitable operating businesses simply to generate additional cash flow.

He argued that such acquisitions would make Strategy more complicated and potentially harder for investors to understand and value.

Saylor encouraged MSTR investors to maintain a long-term perspective, recommending at least a four-year horizon and suggesting that seven to 10 years would be preferable.

While recognizing the frustration caused by the stock’s recent decline, he said investors should be prepared to endure difficult periods as Strategy continues its Bitcoin-focused treasury strategy.