Strategy policy bars STRC buyback funding from the USD Reserve

Strategy's Form 8-K filed Oct. 26, 2026, lists 2,068,459 STRC preferred shares bought back for $204.9 million from Oct. 19-25. The money came from USD Cash, which ended the week at $242.4 million. If you hold STRC, that source matters: a board policy adopted June 29, 2026, keeps preferred stock buybacks out of Strategy's $4.83 billion USD Reserve. Any use of the reserve beyond dividends and interest needs board authorization.

STRC is Strategy's perpetual preferred stock. Dividends accumulate on a $100 stated amount at a rate the company reviews monthly and are paid only if the board declares them. STRC works much like a high-yield bond with no maturity date.

Strategy keeps its dollars in two pools. The USD Reserve is meant to support preferred dividends and debt interest. USD Cash can go to bitcoin purchases, topping up the reserve or other capital uses such as buybacks.

The buyback took nearly half of the flexible pool: by our calculation, USD Cash fell $204.9 million, or about 45.8%, from $447.3 million on Oct. 18. That equals the buyback total. The reserve stood at the same rounded $4.83 billion on both dates.

The reserve paid dividends, not buybacks

In the week before, the reserve went to its stated purpose. The Oct. 19 filing records a $45.5 million draw from Oct. 12-18 to pay dividends on Strategy's preferred stock as a whole.

The average buyback price neared $100

By our calculation, dividing $204.9 million by 2,068,459 shares, Strategy paid about $99.06 per STRC share on average from Oct. 19-25. The week before, it bought 1,938,780 shares for $193.1 million, also with USD Cash. That works out to about $99.60 each by the same method. Both averages carry a margin of about 3 cents because the totals are rounded.

The buybacks began well below that level. Strategy's July 27 release records the first STRC repurchases, July 20-26, 2026, at 288,930 shares for about $25.0 million. That is an average of about $86.52 a share.

The same release set the pace. Strategy said it intends to buy STRC regularly while it trades below its $100 stated amount. The pace is meant to be faster at deeper discounts and to taper as the price nears $100.

Room remains under the program. The board's increase, disclosed Oct. 19, lifted the preferred stock repurchase authorization from $2.0 billion to $3.0 billion, counting buybacks already made. After the Oct. 19-25 repurchases, $956.8 million was left, shared by all four of Strategy's preferred series. The authorization carries no obligation to buy, has no expiration date and can be changed or stopped at any time.

No bitcoin bought and no new shares sold

The Oct. 26 filing shows no bitcoin purchases or sales from Oct. 19-25, 2026. As of Oct. 25, Strategy held about 848,517 bitcoin. It acquired them for an aggregate $64.02 billion, or about $75,446 per coin including fees and expenses.

Strategy also sold no shares that week under its at-the-market, or ATM, program. Such a program lets a company sell new stock gradually at market prices.

ATM sales paid for the prior bitcoin purchase. From Oct. 12-18, Strategy bought 267 bitcoin for $22.1 million, an average of $82,900 each. It used $22.0 million of MSTR ATM net proceeds and $0.1 million of USD Cash.

The reserve has a floor, not a guarantee

The June 29, 2026, policy sets the base case for STRC holders. Management must keep a USD Reserve of at least 12 months of expected preferred dividends and interest. Any cut below that floor requires board authorization.

The reserve has grown since Strategy set it up on Dec. 1, 2025, with $1.44 billion from MSTR share sales. The aim then was 12 months or more of dividends and interest, with a long-term goal of 24 months or more. By late July 2026 it stood at $3.75 billion. Strategy put that at about 25 months of expected preferred dividends, a July figure based on dividends alone.

STRC's dividend rate was set at 12.00% a year for record dates from July 1, 2026. In its July 27 release, Strategy said management would recommend keeping that rate until STRC shows sustained, healthy trading near $100.

Strategy's own STRC prospectus, dated March 23, 2026, marks the limits. Dividends accumulate on the $100 stated amount but are paid only when the board declares them. The prospectus also warns that reserve cash alone does not ensure a dividend can legally be declared. Delaware law requires sufficient surplus or net profits.

Since June 2026, Strategy has said a below-$100 price will not by itself trigger a dividend rate increase, and it counts buybacks among its other tools.

Two numbers are next for STRC holders to watch. A Strategy rate notice would show the dividend rate in effect for October 2026. A coverage update would show how many months of dividends and interest the reserve covers today.