Strategy To Expand Bitcoin Push with $1B Preferred Stock Sale

Bitcoin-focused company Strategy, formerly MicroStrategy, recently boosted its latest stock offering from $250 million to $1 billion. The company is using the funds to fuel its growing Bitcoin (BTC) portfolio, which now holds nearly 3% of the total BTC supply.

Strategy Makes a Bigger Bet on Bitcoin

Strategy said it will sell over 11.7 million shares of its 10% Series A Stride Preferred Stock (STRD) at $85 each. As long as everything goes as planned, the deal should be completed by June 10. This move shows the company is investing even more money in Bitcoin. 

The company originally planned to raise $250 million, but strong interest pushed that number up to $1 billion.  After removing fees and costs, Strategy expects to receive about $979.7 million in net proceeds. 

These proceeds will go toward general corporate purposes, including more Bitcoin purchases and working capital. Big banks like Morgan Stanley, Barclays, and TD Securities are backing the STRD launch.

The Strategy Inc’s New Preferred Stocks and Dividend Models

In addition to STRD, Strategy has introduced two other preferred stock offerings: Strike (STRK) and Strife (STRF). Each stock carries a unique structure. STRK is a convertible preferred stock with a fixed 8% annual dividend. 

STRF, on the other hand, is non-convertible but offers a 10% fixed cumulative annual dividend. Notably, STRD, powering this latest raise, is also non-convertible and carries a 10% fixed non-cumulative annual dividend. 

Unlike bonds, perpetual preferred shares do not have a set maturity date. They pay fixed dividends for as long as the company operates, but are not required to be paid back like traditional debt.

Strategy Buys More Bitcoin, Slows Its Pace as Rivals Rise

Alongside the announcement, the Nasdaq-listed firm bought another 705 BTC between May 26 and June 1 for $75.1 million, funded by earlier STRK and STRF stock sales. 

The firm now holds 580,955 BTC worth over $60 billion, with an average price of $70,023, giving it $19.3 billion in unrealized profits. This is about 2.8% of all Bitcoin, making Strategy the largest corporate holder.

However, the firm’s buying pace is slowing. According to research firm K33, this may be due to a smaller premium on Strategy’s shares compared to its Bitcoin holdings. 

Competition is also heating up. On the same day, Strategy upsized its offering, and Metaplanet plans to raise $5.4 billion to buy more BTC, adding to the pressure. This came after the Japanese firm issued $ 21 million in zero-interest bonds to buy Bitcoin on May 29. 

Following the news, Strategy’s shares (MSTR) were up 1.5% in pre-market trading on June 6, according to TradingView. Strategy’s new funding push shows the company remains firmly committed to Bitcoin as its core treasury asset, even as other companies enter the race.