Strategy Launches New Preferred Stock Offering

Strategy (ticker MSTR) has unveiled a new set of perpetual preferred shares, marking the fourth offering from this pioneer in corporate Bitcoin treasury. The company, previously known as MicroStrategy, plans to launch an initial public offering registered under the Securities Act of 1933, comprising 5 million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock, referred to as "STRC". The funds raised will be allocated for general corporate purposes, including Bitcoin acquisitions and working capital. Earlier on Monday, Strategy disclosed that it acquired 6,220 Bitcoin for $739.8 million, bringing its total Bitcoin holdings to 607,770 BTC. According to the announcement, STRC shares will earn cumulative dividends at a variable annual rate based on a stated amount of $100 per share. Dividends will be paid monthly, commencing Aug. 31, provided they are declared by the board of directors or an authorized committee. The initial monthly dividend rate is set at 9% per annum. Perpetual preferred shares come without a maturity date, allowing fixed dividend payments as long as the company remains operational. Other offerings include Strike (STRK), convertible with an 8% fixed dividend; Strife (STRF), non-convertible with a 10% fixed cumulative dividend; and Stride (STRD), which features a fixed 10% non-cumulative annual dividend and is also non-convertible. These offerings complement the company's ambitious "42/42" plan, aiming to raise a total of $84 billion in equity offerings and convertible notes for Bitcoin acquisitions through 2027. Strategy has innovated fundraising strategies for Bitcoin accumulation by launching multiple preferred stock options over recent months. As stated by TD Cowen, these securities offer attractive income and appreciation potential with lower expected volatility compared to common shares or Bitcoin itself. On Monday, Strategy’s stock closed at $426.31 per share, reflecting an increase of 0.7% as per The Block's data. Disclaimer: The Block is an independent media source providing news and research. As of November 2023, Foresight Ventures is a major investor. This article is informational and not intended as legal or financial advice.