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Strategy’s Preferred Stock Recovers As Company Builds Cash Reserve

Strategy’s (NASDAQ: $MSTR) high-yielding preferred stock (NASDAQ: $STRC) is recovering as the serial cryptocurrency acquirer prioritizes building up its cash reserves.

The preferred stock is trading at $94 U.S. on Aug. 5, having gained 6% in the last five trading sessions and risen more than 30% from its June low.

STRC stock bottomed in late June at $71 U.S. per share as Bitcoin (CRYPTO: $BTC) fell to $58,000 U.S.

But since the end of June, Strategy has sold 5,226 Bitcoin for proceeds of $321 million U.S. in three separate transactions.

The sales have been made in large part to demonstrate that the company can use Bitcoin to meet its dividend obligations, rather than treating it as an idle asset.

Strategy has also repurchased $106 million of STRC stock as it seeks to return the preferred stock to its $100 U.S. par value.

In addition, the company increased its U.S. dollar reserves by $250 million U.S. on Aug. 3, bringing its total cash reserves to $4 billion U.S. and calming nervous investors.

Strategy has said it now has more than two years of cash available to cover the dividend on its preferred stock, which yields 12%.

As for Bitcoin, its price was at $64,700 U.S. on Aug. 5, a level it has been at for much of the past month. The June decline to $58,000 U.S. was the cryptocurrency’s low for the year.

MSTR stock has declined 74% over the past 12 months to trade at $97.37 U.S. per share.