The new repurchase authorization covers roughly 37% of the 13% preferred issue, even as the share count grew by 1.3 million in a single week.
Strive, the bitcoin treasury company, has set up a facility to repurchase up to $500 million of its SATA preferred stock, the second major bitcoin holder to move to support its preferred shares in less than a week.
"The Company has implemented a repurchase facility of up to $500 million for SATA, providing management with flexibility to repurchase SATA from time to time," Strive said in a regulatory filing on Monday. The company did not report any purchases under the facility, nor did it set a timetable or say how repurchases would be funded.
The numbers
The facility is large relative to both the security and the company's cash. Strive had about 13.5 million SATA shares outstanding as of . At the $100 stated value, that is roughly $1.35 billion, meaning the facility could retire about 37% of the issue. Strive held $284.7 million of cash, so the authorization exceeds its cash on hand by about $215 million.
SATA pays a variable dividend currently set at 13% for October, or $0.0516 per share per business day. At the current share count, that is about $175 million a year in dividends. The preferred traded at about $100.01, essentially at par.
Selling and buying at once
Strive has not stopped issuing. Its SATA share count rose from 12.19 million on to 12.94 million on and 13.50 million on , an increase of about 1.3 million shares in a week. The company also bought 2,000 bitcoin between and at an average price of about $84,422.
One reading of that combination is that the facility is insurance rather than a retreat. As long as SATA trades at or above $100, Strive can keep selling it to fund bitcoin purchases. If it slips below par, the company now has a ready tool to buy it back and defend the price that makes the funding model work.
A sector shift
Strategy, the largest corporate bitcoin holder, recently repurchased $176 million of its own STRC preferred. Two buybacks in a week suggest the preferred-funded treasury model is moving from pure issuance toward active management of its funding instruments. That is a natural step when bitcoin trades 31.9% below its high and investors grow more sensitive to the yield they demand.
The decisive question is what Strive does if SATA falls below par. Spending scarce cash to support the preferred would mean fewer dollars for bitcoin. Watching whether the company draws on the facility, and how it funds it, will show whether this is a backstop or the start of a defensive cycle.