Strategy is planning additional capital raises to fund Bitcoin purchases despite the recent market downslide and macro uncertainty.
Strategy, previously known as MicroStrategy, plans to raise $21 billion through its class A strike preferred stock as the firm seeks to bolster its investment portfolio. According to a filing with the U.S. Securities and Exchange Commission and a company statement, Strategy will use proceeds from the sale to fund general corporate operations, which could include more Bitcoin (BTC) buys.
Offering STRK shares via an at-the-market sale sale adds to Strategy’s existing ATM equity program for the “21/21” roadmap, a plan to raise and invest $42 billion in BTC championed by executive chairman Michael Saylor.
Currently, Saylor’s company owns approximately 499,096 BTC valued at over $41 billion. Strategy has spent about $33.1 billion acquiring this massive BTC cache at an average price of $66,357—mostly funded by capital raised from equity sales.
STRK, which is a perpetual preferred stock, adds a new layer of flexibility for Strategy as it continues to buy BTC through share sales.
Perpetual preferred stocks aren’t bound to a maturity date or a fixed redemption period like bonds. Instead, vehicles like STRK pay a predetermined dividend in perpetuity, 8% in Strategy’s case, while the issuer remains in business. STRK investors can also swap their holdings for class A common shares, although this process involves specific requirements and conditions.
Furthermore, Strategy can exercise a buyback option for the total unbought allocation if STRK’s value declines 25% below its initial value at issuance.
TradingView data noted that STRK was down 2.1% at last week’s close. Strategy did not see new patronage for its class A common stock between March 3 and March 7, meaning the firm will likely not disclose a new BTC acquisition this week.
