MicroStrategy's Bitcoin Yield has fallen to 4.5%, a 66% drop from the 13.3% it hit in late May, as the company sold $544.5 million in MSTR shares last week without buying any additional Bitcoin. The yield decline, which the firm warned about in its Q1 filing, comes as it also bought back $25 million of its preferred shares (STRC), a move one investor called a "major step forward" for Bitcoin corporate finance.
Bitcoin Yield Drops 66% from May Peak
The Bitcoin Yield — a metric MicroStrategy uses to measure the percentage change in its Bitcoin holdings relative to its diluted shares — stood at 9.4% on May 3, climbed to 13.3% by May 25, and now sits at 4.5%. The company warned in its Q1 filing that if shares increase faster than Bitcoin holdings, the yield would decrease. That's exactly what happened: last week it sold $544.5 million in MSTR shares and didn't buy a single coin.
MicroStrategy now holds 843,775 BTC, over 4% of the total 21 million supply. But the average purchase price is $75,476 per coin, while the current price is around $64,762 — an unrealized loss of about $8.9 billion. The company reported a first-quarter net loss of $12.54 billion, or $38.25 per share.
Preferred Share Buyback Saves $3.5M Annually
MicroStrategy bought back $25 million of its preferred shares (STRC) at an average price of $86.52, retiring 288,930 shares. That saves roughly $3.5 million annually in dividends. Total annual obligations for dividends and loan interest are about $1.76 billion.
Cash reserves grew from $2.55 billion on June 28 to $3.75 billion on July 26, covering roughly 25 months of dividends. Investor Andrew Webley said the preferred shares now cover 2.1 years of payments without new fundraising, calling it "a major step forward in Bitcoin corporate finance." A former Goldman Sachs credit specialist argued that STRC may be mispriced by 13%.
Q2 Results Due Thursday
Second-quarter results are scheduled for release after the close on Thursday, July 30. The cash buildup — up $1.2 billion in a month — suggests the company is prioritizing liquidity. The Q1 net loss of $12.54 billion looms large, and investors will be watching for any update on Bitcoin buying plans.
Schiff Takes a Swipe
Peter Schiff, a longtime Bitcoin critic and gold advocate, took a swipe at Michael Saylor over the declining Bitcoin Yield. His comments are the latest in a running feud between the two, but the numbers this time give Schiff some ammunition — the yield is at its lowest since the metric was introduced.
With Q2 earnings due in two days, the big question is whether MicroStrategy will resume buying Bitcoin or continue to let the yield slide. The preferred share buyback and cash hoard suggest a more defensive posture, at least for now.
