By Mackenzie Tatananni

Strategy's Stretch preferred stock — its key vehicle for funding Bitcoin purchases — has been in a tailspin. On the heels of a record low, insiders including the company's chief executive are snapping up shares.

CEO Phong Le's revocable trust made its first-ever stock purchase on June 22, acquiring 11,000 shares of the Stretch preferred stock that trades under ticker STRC. At an average price of $90.80 a share, the transaction totaled $998,800.

Beyond his trust, Le's direct holdings include 126,323 shares of common stock as well as various classes of preferred stock. He also holds Stretch preferred stock indirectly through his children.

The CEO wasn't the only high-ranking insider to buy stock. Thomas Chow, Strategy's executive vice president and general counsel, purchased shares of both STRC and the preferred stock that trades under ticker STRK on June 16. Chow acquired 100 shares of STRC at $92.71 a share and 11 shares of STRK at $66.10 a share.

Investor attention has centered lately on STRC preferred, which fell to a record low of $71.25 on June 26, sharply below the stock's par value of $100. If STRC trades at or above par, Strategy can easily raise capital for Bitcoin purchases by issuing new shares; conversely, that funding engine stalls if the stock price drops.

On Monday, Strategy unveiled a new financial framework including stock buybacks and strategic Bitcoin sales. Le stated that the company was moving from "one-way capital issuance to active capital management," signaling an evolution beyond Strategy's identity as simply a Bitcoin treasury company.

Citi Research analyst Peter Christiansen said the plan "buys more time" for Strategy until Bitcoin's price stabilizes. In his view, the stock's recovery is contingent on a higher Bitcoin price as well as an expanding market-to-net asset value, which reflects the premium Strategy commands over its crypto holdings.

Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members — so-called insiders — as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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