Strategy Moves to Raise $2.1B From Shares to Buy More Bitcoin

Strategy, the software intelligence company formerly known as MicroStrategy, is once again doubling down on Bitcoin (BTC). 

The firm announced earlier today that it plans to sell up to $2.1 billion worth of preferred stock. The money raised will mainly go toward buying more Bitcoin, reinforcing the company’s long-standing bet on the digital asset.

Strategy To Sell Preferred Stock With Major Partnerships

Strategy announced that it will sell its 10.00% Series A Perpetual Preferred Stock shares under the ticker “STRF” on Nasdaq. The Nasdaq-listed company has made a deal with TD Securities, Barclays Capital, and the Benchmark Company to handle the sales. 

Depending on market conditions, these firms will act as agents and can sell the shares over time. Notably, no set number of shares must be sold, and the agents are not required to hit any sales target. 

They will receive a fee of up to 2% of what they sell. The returns from this stock sale will not be kept in escrow, and the company can use the funds as needed.

The stock is trading at $100.65 as of May 21. The new shares will carry the same terms as the 8.5 million already in circulation.

Strategy New STRF Offering Brings Flexibility Amid Legal Heat

The new share offering allows Strategy to sell shares when market conditions are right. This allows the company to raise money without rushing or locking into strict terms.

Each share is worth $100 and pays a 10% yearly dividend. However, this 10% dividend is not guaranteed. It depends on whether the company has enough money and whether the board agrees to pay it.

Meanwhile, the Bitcoin-focused firm is currently facing serious legal trouble. A group of investors recently filed a class action lawsuit against Strategy. 

The complaints accused the firm of making false and misleading statements about its profits and the risks associated with its large Bitcoin holdings.

Bitcoin at the Center of Strategy’s Future

This offering comes as Bitcoin just hit a new all-time high. Earlier today, the asset price briefly touched $111,861 before easing back to around $111,000. For Strategy, this is a strong signal to keep investing in Bitcoin.

As of May 21, Strategy owns 576,230 BTC. Starting in August 2020, these were bought at an average price of $69,726 per Bitcoin. At today’s value, those holdings are worth just under $64 billion, nearly 59% more than the company initially paid.

Bitcoin now accounts for more than half of Strategy’s total market value, which is $111.4 billion. This latest stock offering will help the company buy more Bitcoin and support its general business needs.