Strategy moved on multiple financial fronts on Friday — agreeing to repurchase approximately $1.5 billion of its outstanding convertible notes at a discount while simultaneously funding an 11,707 Bitcoin purchase, as its STRC preferred stock logged the busiest trading session in its history with $1.5 billion in volume ahead of its ex-dividend date.
The convertible note repurchase
Strategy filed Friday morning disclosing an agreement to repurchase approximately $1.5 billion of its 0% Convertible Senior Notes due 2029 in privately negotiated transactions with certain noteholders. The company expects to pay roughly $1.38 billion in cash for the notes — implying a meaningful discount to par value — with settlement expected around May 19. Following completion, the repurchased notes will be cancelled, leaving approximately $1.5 billion of the 2029 notes still outstanding.
The 2029 convertible notes were originally issued in November 2024 with a 0% coupon and a $3 billion notional size. They mature on December 2, 2029 and carry a conversion price of $672.40 per share — a level that sits dramatically above Strategy's current share price of approximately $183, meaning the conversion option carries no practical value at current trading levels. Repurchasing the notes at a discount to par allows Strategy to retire debt cheaply while the conversion feature is deeply out of the money.
The final repurchase price remains subject to adjustment and will partly depend on the volume-weighted average price of Strategy's Class A common stock during a designated measurement period.
How Strategy plans to fund it
Strategy said it expects to fund the repurchases through a combination of existing cash reserves, proceeds from its at-the-market equity offering program, and potentially the sale of Bitcoin holdings. The inclusion of potential Bitcoin sales as a funding source is notable — it marks one of the clearer signals that Strategy views its Bitcoin treasury as a liquid financial resource that can be deployed for corporate purposes rather than purely a long-term hold.
MSTR common stock was down approximately 2% in pre-market trading alongside an overnight decline in Bitcoin back to $80,400 following Friday's broader market selloff driven by surging bond yields and inflation fears.
STRC logs a record $1.5 billion trading session
Separately, Strategy's STRC preferred stock recorded its busiest trading session on record Friday, with $1.5 billion in volume driven by elevated activity ahead of the instrument's ex-dividend date. Heavy trading ahead of ex-dividend dates is a well-established market dynamic as investors position to capture the upcoming distribution — but the record volume figure underscores the degree to which Strategy's various securities have attracted significant market participation beyond its common stock.
The Broader Context
Friday's moves come at a challenging moment for Strategy's balance sheet narrative. Bitcoin's retreat to $80,400 overnight and a broader crypto and equity selloff driven by the fastest repricing of Federal Reserve rate expectations in years — from 28% cut odds to nearly 50% hike odds in a single week — have compressed the mark-to-market value of Strategy's Bitcoin holdings and pushed its share price lower alongside the broader risk-off move.
The decision to repurchase convertible notes at a discount rather than wait for maturity reflects an opportunistic approach to liability management — locking in debt retirement below par while the conversion option is worthless. Whether the potential Bitcoin sales required to fund the transaction represent a meaningful shift in Strategy's accumulation posture, or a tactical liquidity move consistent with its overall treasury strategy, will be closely watched by the market in the days following the May 19 settlement date.
Brian
Alex
Kikyo