Strategy claims its dollar assets have nearly fully offset debt, with net leverage down to 0.1%. The company's calculation is: approximately $6.75 billion in convertible bonds minus $6.69 billion in dollar assets, with the difference divided by the market value of Bitcoin reserves.

Dollar liquidity is divided into two parts: $5.1 billion in dollar reserves for preferred stock dividends and interest, covering about four years of annual expenses of approximately $1.7 billion; and a separate cash pool of $1.59 billion, which can be used to buy Bitcoin, pay interest, repurchase common or preferred stock, repay convertible bonds, or increase reserves. The gap is about $60 million.

Bitcoin holdings remain at 840,447 coins, approximately 4% of the total cap, with a total cost of about $63.36 billion and an average price of $75,385. In the recent week, 18,261,118 shares of common stock were sold, netting about $2 billion, during which no Bitcoin was bought or sold: $136.4 million was used to repurchase STRC preferred stock, $300 million was added to reserves, and the remaining approximately $1.59 billion established the cash pool.

In the second quarter, $1.5 billion of 2029 zero-coupon convertible bonds were repurchased at a discount of 20% of face value, reducing debt from $8.2 billion to about $6.7 billion. The mixed coupon rate on convertible bonds is about 0.5%, and the company states there are no traditional secured debts or margin clauses that would force the sale of coins upon price triggers. The scale of preferred stock remains around $15.1 billion, which is not offset in this net leverage formula. STRC has rebounded over 35% from its June low to about $97.23. Reports indicate that common stock surged about 12% that day.

The board has also authorized the sale of up to $5 billion in Bitcoin for reserves, dividends, interest, and stock buybacks; there is also a $1 billion buyback limit for common stock. Executive Chairman Michael Saylor stated that dollar cash strengthens the digital credit capital framework, with separate accounting for Bitcoin treasury purposes.

The buyers are market funds absorbing the newly issued stock, while the sellers are companies converting equity into dollar buffers. Funds are flowing from common stockholders to preferred stockholders and convertible bondholders, with Bitcoin positions unchanged this week. Beneficiaries are creditors and preferred stockholders fearing forced sales; those under pressure are diluted common stockholders. This is a refinancing-driven reduction in leverage numbers, not a reduction in Bitcoin holdings.

Source: Public information