Strategy Plans $1.5B Buyback; Bitcoin Sales Could Fund It

On May 15, Strategy Inc. filed a Form 8-K announcing privately negotiated agreements to repurchase about $1.5 billion principal amount of its 0% convertible senior notes due 2029. The company estimated the cash repurchase price at roughly $1.38 billion and said the final amount will partly depend on the trading price of its Class A common stock during a specified measurement period. The transactions are expected to settle on or about May 19.

The agreements were reached with selected noteholders. Strategy intends to cancel the repurchased notes after settlement, removing them from its outstanding debt rather than leaving them available for resale or conversion. The filing cautioned that the actual cash paid could differ from the estimated aggregate repurchase price and identified risks tied to pricing, funding, settlement, cancellation and remaining debt balances.

Strategy issued the 0% convertible notes in November 2024, when the company still operated as MicroStrategy, to raise capital for bitcoin purchases and for general corporate purposes. That offering reached $3 billion after an additional allocation option was exercised.

The repurchase follows a first quarter in which Strategy reported a $12.54 billion net loss, driven by $14.46 billion in unrealized losses on its bitcoin holdings. The filing shows the company holds 818,869 bitcoins as of the filing date.

The Form 8-K lists potential funding sources for the repurchase, noting: “Strategy expects to fund the repurchases with available cash reserves, proceeds from sales of securities under its at-the-market offering program, and/or proceeds from the sale of bitcoin.” The filing did not commit to any bitcoin sales and described the transaction as dependent on market conditions and equity pricing.

Executive Chairman Michael Saylor has said the company may sell some bitcoin to fund dividends; Chief Executive Phong Le suggested bitcoin sales could be considered if they would be accretive to bitcoin per share. Those comments were reiterated in the context of the filing but no sale was announced.

The repurchase is one element of a broader capital-structure program that included a $2 billion offering of 0% convertible senior notes due 2030 in February 2025 and several preferred securities offerings. Those preferred instruments include Strategy Strike (STRK), an 8% convertible preferred stock; Strategy Strife (STRF), a 10% perpetual preferred security; Strategy Stride (STRD), a junior perpetual preferred; and Strategy Stretch (STRC), a variable-rate perpetual preferred stock.

By cancelling the repurchased notes, Strategy will reduce its outstanding debt once the transaction settles. The company noted that the final cash amount, the funding path chosen and the timing of settlement could change.