Strategy issues preferred shares to raise $21 billion, plans to increase BTC holdings
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Strategy issues preferred shares to raise $21 billion, plans to increase BTC holdings
Strategy aims to provide $21 billion in new sustainable STRK products to increase BTC holdings.
Navigating Web3 tides with focused insightsSource: cryptoslate
Translation: Blockchain Knight
Strategy (formerly MicroStrategy) has announced plans to raise $21 billion through its Series A preferred stock (STRK) to acquire more BTC.
According to a statement on March 10, the company has entered into a sales agreement to issue and sell shares of its 8.00% Series A perpetual convertible preferred stock on an "at-the-market" (ATM) basis. The shares will be sold at a par value of $0.001 per share, with a total issuance cap of $21 billion.
Investors holding STRK may convert their shares into Class A common stock under certain conditions.
Strategy stated that it will conduct sales under the ATM program gradually, based on factors such as trading volume and price volatility.
Understanding STRK
STRK is a perpetual preferred stock designed to provide additional liquidity for Strategy's BTC acquisition initiatives.
Unlike bonds with fixed maturity dates, perpetual preferred stocks have no redemption period. Instead, STRK will pay an 8% annual dividend as long as the company remains in operation.
Since launching this financial instrument in January, Strategy has raised over $584 million through its convertible preferred stock offerings.
The company also claims that STRK is the top-performing and most liquid preferred stock issued in the past decade.
BTC Purchases
In parallel, the company intends to use the net proceeds from the ATM program for general corporate purposes, including the acquisition of additional BTC.
This move aligns with Strategy’s ongoing strategy of strengthening its BTC holdings through various financial mechanisms, including equity financing, debt issuance, and operating cash flow.
On February 24, the company made its most recent BTC purchase, acquiring 20,356 BTC for approximately $2 billion. This brought its total BTC holdings to 499,096 BTC, valued at over $47 billion.
Since Michael Saylor launched the BTC accumulation strategy, Strategy has spent $33.1 billion (including associated fees), with an average purchase price of $66,357 per BTC.
Despite recent fundraising efforts, Strategy’s stock continues to face downward pressure. According to Google Finance, MSTR (Strategy’s ticker symbol) is trading at $252.48, down 12% over the past day.
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