New issuance of preferred stocks announced for Bitcoin purchases financing
In a significant move, Strategy has announced its latest strategy for utilizing the proceeds from its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC Stock) offering. The company plans to allocate the net proceeds, estimated at approximately $2.474 billion, towards general corporate purposes, including the acquisition of bitcoin and addressing working capital needs [1][3].
The initial offering, valued at $500 million for 5 million shares priced at $100 each, was increased due to strong investor demand. The company ultimately priced the shares at $90 each, with a scheduled settlement set for July 29, 2025 [1][2][4]. This expansion reflects Strategy's commitment to substantially increasing its bitcoin purchases, while also supporting broader corporate financial requirements.
One of the key features of the STRC Stock is a variable monthly dividend, starting at an annualized 9.00%, subject to adjustment by Strategy under predefined constraints. The aim is to maintain the stock's trading price near $100 per share. If dividends are unpaid, they will accrue and compound monthly. The company also holds redemption rights post-listing, making this offering potentially attractive for investors [1][2].
In addition to its bitcoin acquisition program, Strategy has made its fourth preferred stock offering to grow its bitcoin treasury. The latest acquisition consists of 6,220 BTC. It is worth noting that this bitcoin acquisition is separate from the 7Bit Casino offer, which is not related to Strategy's bitcoin acquisition or preferred stock offerings [5].
Strategy has also outlined redemption scenarios in its filing. If the need arises, the company can redeem the shares after listing them on a major exchange at $101 per share plus any unpaid dividends. In such redemption scenarios, shareholders will receive the liquidation preference and any due dividends [1][2].
This preferred stock offering allows Strategy to significantly boost its bitcoin acquisition program while also addressing other operational and working capital demands, signaling a dual focus on expanding its bitcoin holdings and maintaining corporate liquidity [1][3].
Strategy's net proceeds from the Variable Rate Series A Perpetual Stretch Preferred Stock offering will be allocated towards general corporate purposes, including the acquisition of bitcoin and addressing working capital needs. This expansion of the corporation's bitcoin purchases reflects its commitment to substantially increasing its holdings while also supporting broader financial requirements in the domain of finance.
