Strategy Puts Net Leverage at 3% Under Formula Excluding Preferred Stock

Strategy put its net leverage at 3% in a Nov. 2 update. The company calculates the measure as debt minus USD Assets, divided by BTC Reserve. Preferred stock is not included as a separate term, so the figure does not measure every claim against Strategy’s Bitcoin holdings.

Strategy wrote that its Bitcoin holdings had increased sixfold since January 2023 while net leverage fell from 108% to 3%. The comparison does not establish whether Strategy used the same calculation for both dates.

From Oct. 26 through Nov. 1, Strategy bought 811 Bitcoin (BTC) for $65.5 million and repurchased $208.2 million in STRC preferred shares using USD Cash. Its holdings stood at 849,327 BTC as of Nov. 1 after a week that included a Bitcoin purchase and STRC repurchase.

Strategy sold 1,178,552 MSTR shares for $164 million in net proceeds during the period. It directed $65.5 million to the Bitcoin purchase and allocated $98.5 million to USD Cash. The reported share total includes sales awaiting settlement on Oct. 30.

As of Nov. 1, Strategy had $4.79 billion in USD Reserve and $132.7 million in USD Cash. The reserve is intended to support preferred dividends and debt interest. USD Cash can be used for broader purposes, including Bitcoin purchases. Strategy also had $18.62 billion available for potential issuance and sale through its MSTR at-the-market program. That capacity is not cash already raised.

Strategy provided no target or timetable for a larger Bitcoin purchase.