Strategy, the Bitcoin-focused company formerly known as MicroStrategy, has announced it now plans to raise more than $700 million through a new preferred stock offering to fund additional Bitcoin (BTC) purchases and general business operations.
The company priced 8.5 million shares of its “perpetual strife preferred stock” at $85 each, it said in a recent press release. The stock carries a 10% annual dividend on a $100 stated value, paid quarterly in cash.
If the company misses a dividend payment, the unpaid amount compounds, and the rate climbs by one percentage point each quarter—capped at 18%. The design is meant to offer a form of penalty interest and push Strategy to maintain the regular payments.
For investors, it provides downside protection. The firm had previously planned to raise $500 million through the offering. It’s now expected to net about $711.2 million from the sale, which settles on March 25.
The company will use the proceeds partly to buy more Bitcoin—consistent with its long-running treasury strategy—and for working capital. The preferred shares are callable by the company under certain conditions, including if fewer than 25% of the original shares remain outstanding or if there are adverse tax changes.
Investors can also demand the company repurchase their shares if a “fundamental change” occurs.
Strategy’s Ongoing Bitcoin Accumulation
The offering, underwritten by a syndicate led by Morgan Stanley, Barclays, and Citigroup, gives Strategy yet another vehicle to continue adding Bitcoin to its corporate balance sheet.
That balance sheet is now valued at around $41.8 billion, as the firm holds 499,226 BTC purchased at an average cost of $66,406 per coin. While the firm has accumulated BTC since early 2020, its pace exploded late last year as it started financing these acquisitions through stock and bond offerings.
