Strategy Plans to Raise $21 Billion for Bitcoin Acquisition
Strategy, formerly known as MicroStrategy, has announced its intention to raise $21 billion through its Series A preferred stock (STRK) in order to acquire more Bitcoin.
Details of the Plan
According to a statement released on March 10, the company has entered into a sales agreement to issue and sell shares of its 8.00% Series A perpetual strike preferred stock at the market (ATM). The shares will be priced at $0.001, with the total offering capped at $21 billion.
- Investors holding STRK can exchange their shares for Class A common stock, subject to specific conditions.
- Sales under the ATM Program will be conducted gradually, taking into account factors such as trading volume and price fluctuations.
Understanding STRK
STRK is a perpetual preferred stock that provides additional liquidity for Strategy’s Bitcoin acquisition plans. Unlike bonds with fixed maturity dates, perpetual preferred stocks do not have a redemption period. Instead, STRK offers an 8% annual dividend as long as the company remains operational.
Since introducing STRK in January, Strategy has already raised over $584 million through its convertible preferred stock offering. The company claims that STRK has been the highest-performing and most liquid preferred stock of the past decade.
Bitcoin Purchases
Strategy plans to use the net proceeds from the ATM Program for general corporate purposes, including acquiring more Bitcoin. This aligns with the company’s strategy of strengthening its Bitcoin position through various financial mechanisms.
- On Feb. 24, Strategy made its most recent Bitcoin purchase, adding 20,356 BTC for approximately $2 billion.
- The company’s total Bitcoin holdings now stand at 499,096 BTC, valued at over $47 billion.
Despite the recent fundraising effort, Strategy’s stock has faced downward pressure, with MSTR trading at $252.48 after a 12% decline in the past day according to Google Finance data.
