Strategy's Preferred Stock Approaches Par Value Following Aggressive Buybacks
The preferred stock of Strategy (NASDAQ: MSTR), known as Stretch (NASDAQ: STRC), is nearing its par value of $100 per share after the company executed significant buyback programs. As of September 17, the stock closed at $97.07, up from below $75 in June. Since late June, Strategy has repurchased nearly 9.96 million preferred shares for a total cost of $950.8 million and an additional 1.42 million shares between September 8-13 for $139.3 million. The company aims to restore the stock's value to its par level, which is crucial as it has no direct relation to market price but serves as a minimum valuation set by the corporation. The preferred stock offers investors a high dividend yield of 12% annually with bi-monthly distributions of $0.50 per share. However, some critics argue that Strategy's focus on its preferred shares may have diverted attention from Bitcoin accumulation. Strategy has withheld new Bitcoin purchases during buyback periods and even sold BTC at a loss to raise capital for repurchases. Over the past year, MSTR stock has dropped 62%, trading currently at $126.18 per share.
