TL;DR
- Strategy will increase its STRF preferred stock offering to $722.5 million, surpassing the initial $500 million goal.
- The funds raised will be used for Bitcoin acquisition and strengthening working capital.
- The company now holds nearly 500,000 BTC, valued at over $41 billion, and plans to continue increasing its reserve.
Strategy has announced the expansion of its STRF preferred stock offering, raising the total amount to $722.5 million, exceeding the initially planned $500 million. The company will sell 8.5 million shares of its Series A Perpetual Strife Preferred Stock at a price of $85 per share. The transaction is scheduled to close on March 25, 2025, subject to customary closing conditions.
The company will use the proceeds from this offering for general corporate purposes, such as Bitcoin acquisition and strengthening its working capital. Additionally, the issued shares will offer a fixed annual return of 10%, calculated on a stated amount of $100 per share. Dividends will be paid quarterly, with the first payment expected on June 30, 2025, subject to board approval.
Strategy: How Do the Preferred Shares Work?
A key aspect of these preferred shares is the possibility for unpaid dividends to accumulate and compound annually. Reaching a maximum of 18% if payments are delayed for an extended period. Furthermore, Strategy retains the right to redeem all preferred shares under certain conditions. Such as a significant reduction in its original issuance or specific tax events.
Accumulating More Bitcoin
This strategy is part of the company’s plans to acquire more Bitcoin. In line with this approach, Strategy recently acquired an additional 130 BTC for approximately $10.7 million. The company now holds nearly 500,000 BTC, valued at over $41 billion. Despite some investor concerns about the high value of the stock compared to the net asset value of Bitcoin holdings. The company continues with its expansion plan in the crypto market.
With a market capitalization of $78.6 billion, Strategy remains one of the most influential companies in the crypto industry. The STRF stock offering is just one part of its plans. Which include other capital issuances and a clear intention to keep increasing its Bitcoin reserve.
