STRATEGY HAS SPENT $635 MILLION TO MOVE A SHARE $2.66 — PAR IS THE DOOR TO BUYING BITCOIN WITHOUT DILUTING MSTR — LAST WEEK THEY DILUTED MSTR TO GET THERE

Strategy's stretch preferred, STRC, has a stated value of $100. It traded at $97.34 on Tuesday. In June it traded at $71. The company has spent $635.2 million buying its own preferred back to close that gap, $151.8 million of it last week alone, 1,557,177 shares at about $97.48. Phong Le went on Bloomberg Tuesday to talk about a fortress balance sheet, and the fortress is real: 845,050 bitcoin, $63.73 billion of cost, no net debt. But he has already said in public what the $2.66 is for. “When Stretch gets back to par, we'll issue more. We'll buy more Bitcoin.” That is the design, stated by the man running it. Par is a door. On the other side of it, bitcoin gets bought with preferred money and common holders are not diluted to do it. Until it opens, they are. We ran that arithmetic here yesterday: not one share of preferred of any series was sold last week, and every dollar came from selling common. So the company is diluting the common to lift the preferred, so that one day it can stop diluting the common. Nobody is hiding this and it is not a scandal. It is a cost, and the cost has a number. Six hundred and thirty-five million dollars, to move a share two dollars and sixty-six cents. Owning the stock is not owning the coin. The coin has no dividend to fund.