Strategy (formerly MicroStrategy) is making headlines with its ambitious plan to raise $21 billion through its Series A preferred stock (STRK) to acquire more Bitcoin. This move comes as the company continues to solidify its position in the cryptocurrency market under the leadership of CEO Michael Saylor.
According to a statement released on March 10, Strategy has entered into a sales agreement to issue and sell shares of its 8.00% Series A perpetual strike preferred stock at the market (ATM). The offering is capped at $21 billion, with shares priced at $0.001. Investors holding STRK will have the option to exchange their shares for Class A common stock, subject to specific conditions.
The company plans to conduct sales under the ATM Program gradually, taking into account factors such as trading volume and price fluctuations. This strategic approach aims to optimize the acquisition of Bitcoin while maximizing returns for shareholders.
STRK is a perpetual preferred stock that provides additional liquidity for Strategy’s Bitcoin acquisition plans. Unlike bonds with fixed maturity dates, perpetual preferred stocks do not have a redemption period. Instead, STRK offers an 8% annual dividend as long as the company remains operational. Since its introduction in January, Strategy has raised over $584 million through its convertible preferred stock offering.
Strategy’s commitment to acquiring more Bitcoin is evident in its recent purchase of 20,356 BTC for approximately $2 billion on Feb. 24. This transaction increased the company’s total Bitcoin holdings to 499,096 BTC, valued at over $47 billion. With a total expenditure of $33.1 billion, including fees, Strategy has maintained an average purchase price of $66,357 per BTC.
Despite its aggressive Bitcoin accumulation strategy, Strategy’s stock has faced downward pressure in the market. According to Google Finance data, MSTR is currently trading at $252.48 after a 12% decline in the past day. However, the company remains optimistic about its long-term prospects in the cryptocurrency space.
In conclusion, Strategy’s innovative approach to raising funds through its Series A preferred stock demonstrates its unwavering commitment to expanding its Bitcoin holdings. By leveraging various financial mechanisms and strategic partnerships, Strategy aims to position itself as a key player in the ever-evolving world of digital assets.