American-based Strategy (formerly MicroStrategy), led by Bitcoin maximalist Michael Saylor, has announced plans to raise $711.2 million for additional BTC acquisitions. Interestingly, the firm again leveraged its broader approach of using financial instruments to fund Bitcoin purchases.
Details of the $711.2M Capital Raise
The announcement stated that Strategy will raise the intended capital via an offering of 8,500,000 shares of 10% Series A Perpetual Preferred Stock priced at $85 per share. The shares will settle on March 25, 2025, and the company expects to realize the amount after fees and expenses.
In this offering, while investors pay $85 for each share of preferred stock, the company uses a stated value of $100 per share to calculate dividends and set the redemption or liquidation value. If the company needs to buy back the stock or in a liquidation event, the value will be $100 per share (plus any accrued dividends), not the $85 paid.
The preferred stock promises cumulative dividends at a fixed annual rate of 10% based on a stated value. The board will decide when dividends are paid, but they will be made in cash every quarter starting on June 30, 2025.
Extra dividends will build up on the unpaid amount if a dividend payment is missed. These extra dividends will begin at an annual rate of 10% plus an additional 1%, increasing by 1% each quarter until they reach a maximum of 18% per year and all missed payments are caught up.
Additionally, if a significant change occurs that qualifies as a “fundamental change” under the preferred stock rules, shareholders can force the company to buy back some or all of their shares at $100 plus any unpaid dividends.
Strategy Keeps Stacking Bitcoins
Strategy continues its aggressive push into the crypto market. The firm has a long track record of using creative financing to build a significant Bitcoin portfolio, and recent actions show that its commitment remains strong. Its journey began with a landmark acquisition in August 2020, when it spent around $250 million to buy 21,454 at an average price of $11,653.
Last year, the company made its largest Bitcoin purchase in over four years, spending $5.4 billion on the crypto. Fast-forward to today and Strategy has not slowed down. Its latest yet lowest acquisition of 130 bitcoins has pushed its total holdings to 499,226 BTC.
