strategy

Strategy retired $1.5 billion in convertible debt at an 8% discount, funded it through equity and cash, and added more BTC in the same period.
Key Takeaways:
Retired $1.5B in 2029 convertible notes for $1.38B in cash.Debt buyback funded through cash, MSTR equity and STRC preferred stock.Bought additional 24,869 BTC during the same period.Total holdings now 843,738 BTC, convertible debt down to $6.7B.Bondholders need MSTR at $672.40 by 2029, it trades at $159.
When Strategy filed with the SEC announcing it would repurchase $1.5 billion of its 2029 convertible notes, the immediate assumption across most crypto and finance circles was straightforward: a company sitting on a massive Bitcoin reserve, needing $1.38 billion in cash, would have to sell some of that Bitcoin to fund the transaction. The final numbers told a different story.
The press release covering the period May 11-25, 2026 confirmed that the debt repurchase itself was funded through cash reserves and sales of MSTR common stock and STRC preferred stock under Strategy's at-the-market programs. The debt buyback didn't require a single Bitcoin to be liquidated. In the same period, the company purchased an additional 24,869 Bitcoin using proceeds from those equity issuances.
The company that built its entire public identity around accumulating Bitcoin sold equity to clean up its balance sheet, not coins.
What the transaction actually involved
The 2029 convertible notes being repurchased were originally issued in November 2024 as a $3 billion offering. This transaction retired exactly half of that original issuance. The remaining $1.5 billion stays on the balance sheet under the same terms.
Strategy paid approximately $1.38 billion to retire $1.5 billion in face value - a discount of roughly $120 million, or about 8 cents on the dollar below par. Through the structure of the repurchase, Strategy generated a BTC Yield of 0.7%, a BTC Gain of 4,391 Bitcoin, and a BTC dollar gain of $333 million. The debt retirement itself became a Bitcoin-accretive transaction.
Total convertible debt outstanding dropped from $8.2 billion to $6.7 billion. The USD Reserve as of May 25 stands at $871 million. Year to date, Strategy has achieved a BTC Yield of 13.3%, a BTC Gain of 89,378 Bitcoin, and a BTC dollar gain of $6.8 billion.
The capital structure Strategy used
To fund the $1.38 billion repurchase without touching its Bitcoin reserve for the debt buyback, Strategy pulled three levers simultaneously.
The first was existing cash reserves, which Strategy has maintained specifically to support debt obligations and preferred stock dividends since establishing the USD Reserve in December 2025.
The second was the ATM equity program for MSTR common stock. Rather than doing a single large share issuance, the at-the-market program allows Strategy to sell shares gradually into the open market. Strategy issued $84 million of MSTR under this program during the period.
The third was STRC preferred stock issuance. Strategy issued an additional $2.0 billion notional of Variable Rate Series A Perpetual Stretch Preferred Stock. The proceeds from this issuance were used both to support the debt repurchase and to purchase the additional 24,869 Bitcoin.
The net result: less debt, more Bitcoin, no Bitcoin sold for the buyback.
Michael Saylor described the approach as a demonstration of the optionality built into the company's capital structure. "Strategy has the flexibility to fund strategic transactions using cash, Digital Equity, Digital Credit, or Digital Capital, giving us multiple levers to optimize our balance sheet and respond to market conditions," he said. "We remain focused on increasing Bitcoin Per Share for our common shareholders over the long term while maintaining a fortress balance sheet for our Digital Credit investors."
It's worth noting that Phong Le, Strategy's CEO, acknowledged in the press release that the broader capital management approach during this period included "the disciplined sale of bitcoin" as one of the tools available to the company. The debt repurchase specifically was not funded through Bitcoin sales, but the company's overall capital framework doesn't treat Bitcoin as completely untouchable. Le's full comment put it plainly: "We retired $1.5 billion of convertible debt for $1.38 billion in cash. Year to date, we have achieved BTC Yield of 13.3%. These actions reflect our continued focus on disciplined capital allocation."
Why the bondholders sold back at a discount
The convertible notes carry a 0% interest rate, meaning holders receive no regular coupon payments. The entire investment thesis for these bondholders was the conversion option — the right to convert the notes into MSTR shares if the stock price climbed high enough.
The conversion price is $672.40 per share. MSTR is currently trading around $159, despite Peter Schiff calling it a Ponzi scheme. For the conversion option to have any value, MSTR needs to gain approximately 267% from current levels before December 2029. That's the math the bondholders who agreed to sell back at 92 cents on the dollar were staring at when they decided to take the certain loss now rather than wait.
The investors who understood these bonds best looked at the 267% gap between current price and conversion price and decided a guaranteed 8% haircut today was preferable to three more years of waiting for a move that might not come.
CFO Andrew Kang framed the transaction as straightforwardly positive for all investor classes. "The repurchase of the 2029 converts is both equity and credit positive for our investors and demonstrates our continued focus on liability management. Strategy remains committed to maintaining a robust cash reserve to support the credit quality of our Digital Credit securities. We plan to replenish our cash reserve over time through a mix of Digital Capital, Digital Credit, and Digital Equity sales based on market conditions."
843,738 BTC and a cleaner balance sheet
As of May 25, 2026, Strategy holds 843,738 Bitcoin with 220,900 Bitcoin Per Share measured in satoshis. Against that Bitcoin position sits $6.7 billion in convertible notes and $15.5 billion in preferred stock outstanding.
The preferred stock figure is significant. While convertible debt came down, the preferred stock obligations represent ongoing dividend commitments that the $871 million USD Reserve exists to service. Strategy has said it plans to replenish that reserve through equity and preferred stock sales as conditions allow.
The 24,869 Bitcoin purchased during the same period as the debt repurchase is the detail that summarizes the overall posture most clearly. A company under genuine balance sheet pressure doesn't add to its Bitcoin position while simultaneously retiring debt. Strategy did both in the same two-week window, using equity markets as the funding mechanism rather than its Bitcoin reserve.
The bondholders who sold back at a discount made a bet that MSTR won't reach $672.40 by 2029. Strategy made a bet it could retire their debt, buy more Bitcoin, and keep its reserve intact doing it. For this round, the numbers confirm Strategy came out ahead on every metric it tracks.
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