Strategy Plans to Raise $2.1 Billion by Issuing Preferred Stock
Strategy, formerly MicroStrategy, plans to raise $2.1 billion by issuing more preferred stock, according to a Securities and Exchange Commission filing on Thursday.
Strategy’s Perpetual Strife Preferred Stock (STRF), which was unveiled in March, offers a 10% annual cash dividend. The product, which is only available to institutional investors, has an escalation mechanism, where its payout can increase if Strategy misses payments.
The offering is intended to be a low-volatility option for investors that dovetails with Strategy’s other fundraising initiatives, including plans to raise $21 billion through Strategy’s Perpetual Strike Preferred Stock (STRK) and $21 billion by issuing the firm’s common shares.
Unlike Strategy’s first STRF offering, which was upsized to $723 million from $500 million, the preferred shares will be offered on the Nasdaq at the product’s market price. In a video posted to X, formerly Twitter, Strategy President and CEO Phong Le noted that STRF’s price has increased 16% to $99.8 from its launch price of $85 per share.
“We’ve been very happy with the performance of STRK and STRF since we rolled these out in the first quarter,” he added, highlighting STRF’s $31 million in daily trading volume.
In the video, Strategy co-founder and Executive Chairman Michael Saylor described STRF as “the crown jewel of our preferred strategy.” In that sense, the company is being “choosy” about how much STRF it issues, he added, acknowledging that $2.1 billion is a modest raise compared to Strategy’s other fundraising efforts.
At the end of the day, STRF is unlocking a new class of investors, Saylor said, who might not be comfortable with buying Bitcoin, a “highly volatile stock,” or convertible debt.
“As the market becomes more comfortable with Bitcoin and more comfortable with our preferred strategy, they’ll start to see just how good these instruments are,” he said. “Strife is an instrument to draw a new class of investors into the Bitcoin universe.”
Strategy is the world’s largest corporate holder of Bitcoin, controlling 576,000 Bitcoin worth roughly $64 billion. Earlier this week, the company said that it had added around $764 million worth of the asset to its corporate coffers.
Strategy’s stock price rose 2.8% to $413 on Thursday, according to Yahoo Finance. Although Bitcoin’s price set a fresh all-time high of $111,000, Strategy’s stock price has yet to eclipse an all-time high of $543, seen in November.
Edited by James Rubin