- Michael Saylor’s Strategy raised its offering from $500M to $2B to buy more Bitcoin.
- The Series A Stretch shares were priced at $90 with an initial dividend yield of 9%.
- The company now holds 607,770 BTC, representing over 3% of all Bitcoin ever mined.
Strategy, the largest corporate holder of Bitcoin, has expanded its preferred equity sale from $500 million to $2 billion. According to Bloomberg, the company made the decision based on strong investor interest, with proceeds earmarked for further Bitcoin acquisitions.
The business intelligence company led by Michael Saylor priced its Series A Perpetual Stretch preferred shares at $90 each, which is below their $100 face value. The initial fixed-rate dividend on these shares is 9%, which makes the deal notably attractive to institutional investors interested in participating in Bitcoin through a corporate vehicle.
The new preferred stock will rank senior to certain existing preferred shares and common stock, but it will be subordinate to older preferred stock and convertible bonds. Several major financial institutions, including Morgan Stanley, Barclays, Moelis & Co., and TD Securities, underwrite the offering.
How Strategy’s Preferred Stock Is Priced and Ranked
Strategy’s Series A Perpetual Stretch preferred shares will be priced below their $100 face value, providing a discount to investors. The shares will pay cumulative dividends, which differ from the company’s other preferred stock offerings. The dividend rate is subject to monthly adjustments, allowing Strategy to increase the yield by any amount.
However, decreases are capped at a maximum annualized rate based on the one-month SOFR benchmark plus 0.25%. This flexible dividend structure is designed to balance investor returns and the company’s emerging financial strategy.
The funds gained from this preferred stock will support its plan to purchase additional Bitcoin, further building the treasury holdings.
Also Read | Strategy Adds $739 Million in Bitcoin, Boosting Unrealized Gains to $28.5 Billion
Strategy’s Bitcoin Holdings and Stock Performance
As of now, Strategy owns approximately 607,770 Bitcoin, valued at about $72 billion. This constitutes roughly 3% of the amount of Bitcoin mined to date, which made the company the largest corporate Bitcoin holder in the world.
Since adopting the treasury policy in 2020, the company has also progressively increased the number of Bitcoins it holds, backing the purchases through a combination of common and preferred shares as well as debt offerings.
Strategy common shares have shown resilience amid this equity offering. At the time of pricing, the stock was trading at nearly $412 per share and had already gained over 40% so far this year. This increase surpasses other market indicators like the S&P 500, which recorded a gain near 9% during the same period.
The stock’s performance correlates primarily with the Bitcoin price rally due to the increased interest of institutions, regulatory developments, and public companies’ increased adoption of Bitcoin treasury strategies.
In addition to strategy, other companies have started implementing similar strategies. A recent example is the Japanese AI company Quantum Solutions, which recently stated that it will purchase Bitcoin as a long-term reserve. Additionally, Bitcoin miners like MARA Holdings, ranking second among corporate Bitcoin owners, are also continuing to add to their holdings.
Also Read | Bitcoin’s 63.35% Dominance: Will Altcoins Experience a Major Reversal?
