Saylor says share buyback isn’t priority as Strategy builds $4.8 billion cash reserve

It’s not a priority, said Executive Chairman Michael Saylor, but Strategy (MSTR) could buy back its own shares if they become cheap enough.

The comments during a Monday Q&A follow a rough stretch for Strategy’s common shareholders. MSTR is down about 38% this year and 73% year-over-year, driven in large part by bitcoin’s BTC$64,295.93 decline, as well as by the consistent issuance of common stock to fund more bitcoin purchases, build cash reserves, pay dividends, and repurchase preferred stock.

“If MSTR is trading at a very, very deep discount to NAV, then probably you would see us do something like that,” Saylor said.

For now, though, Strategy is focused on its preferred stock business, especially STRC.

CEO Phong Le also defended Strategy’s practice of selling new MSTR shares. While some investors worry that issuing more stock dilutes existing shareholders, Le argued that selling shares can help when MSTR trades above the value of the assets backing each share, and Strategy uses the proceeds to buy bitcoin. In that situation, he said, the amount of bitcoin backing each MSTR share can increase.

The recent drop in STRC has also changed how Strategy manages its money.

Le said the biggest lesson was the need to maintain sufficient cash to cover STRC’s dividend payments. Strategy now holds $4.8 billion in U.S. dollars. Saylor said the company plans to maintain large cash balances, giving it more freedom to buy bitcoin, repurchase MSTR or preferred shares or pay down debt.

That flexibility also applies to bitcoin. “We have to be able to sell bitcoin as well as buy bitcoin,” Saylor said.

He also explained how bitcoin’s price could affect future purchases. When BTC trades far above its average price over the past 200 weeks, Strategy may keep more of the cash it raises. When bitcoin is near or below that long-term average, it may signal a buying opportunity.

Unlike MSTR, STRC isn’t meant to deliver big gains through a rising share price. It is designed to provide income through dividends while maintaining a stable price. Saylor said Strategy wants STRC trading near the $100 level, and is prepared to sell more above $100 or support it via buybacks when it falls below.

That predictability, he argued, is part of the product.

Saylor also ruled out buying profitable operating businesses to generate extra cash, saying that would make Strategy more complicated and harder for investors to value.

He said MSTR investors should have at least a four-year time horizon, with seven to 10 years preferable. “I feel your pain,” Saylor said. “But I think we have to be prepared to have difficult years.”