Michael Saylor’s Strategy is intensifying its efforts to raise $500 million through its new preferred equity offering. The company introduced its Series A Perpetual Stretch preferred stock, aiming to attract investors with a 9% annual dividend. This move underscores Strategy’s focus on funding further Bitcoin acquisitions as part of its long-term treasury plan.
The Strategy IPO presents a key development in the firm’s broader fundraising strategy. Investors can purchase STRC preferred shares between $90 and $95, representing a 10% discount from the initial $100 offer. Individuals familiar with the offering, who requested anonymity, said Strategy has already seen increased trading activity following the announcement.
According to people close to the deal, Barclays Plc, Moelis & Co., TD Securities, and Morgan Stanley are managing the offering. The initial pricing is expected this Thursday. Strategy’s preferred equity drive aligns with its mission to boost Bitcoin exposure through innovative financial instruments.
STRC Shares Offer Flexible Terms and Monthly Dividends
The new STRC stock carries an annual dividend of 9%, paid monthly, starting August 31, 2025. Strategy retains the right to adjust the dividend monthly, though the reduction is capped at 0.25% per year or by the one-month SOFR. The terms are cumulative, so unpaid dividends must be settled before future adjustments.
In the event of missed payments, interest will apply, compounding monthly until full payment is made. Strategy can redeem the STRC shares at $101 after a Nasdaq or NYSE listing, including unpaid dividends. The company also holds redemption rights under special conditions, such as tax law changes or low outstanding share levels.
Furthermore, in case of a “fundamental change” like a merger or acquisition, shareholders may demand buybacks at $100 per share. STRC shares also come with a $100 liquidation preference, which may rise based on trading demand. This offering joins Strategy’s broader suite of preferred securities, including STRK, STRF, and STRD.
Also Read: MicroStrategy Rebrands to ‘Strategy,’ Reports Largest Bitcoin Acquisition in Q4 2024
Strategy IPO Boosts Fundraising as Bitcoin Holdings Expand
The Strategy IPO complements the company’s recent $736.4 million raise from selling 1.6 million MSTR shares. With this capital, Strategy’s Bitcoin holdings have grown to 607,770 BTC, acquired at an average cost of $71,756 each. This brings the total investment to $43.61 billion.
Strategy’s stock has risen sharply since Monday’s market close, gaining 47% and generating $119 billion in market value. This performance supported a surge in Bitcoin-related revenues, totaling over $71 billion. The company’s common shares also rose 0.4%, closing at $428 in after-hours trading.
Michael Saylor confirmed the IPO’s focus in an X post, stating that STRC “Stretch” is available to specific investors. He emphasized Strategy’s shift toward preferred shares over common stock or earlier offerings like STRF and STRD.
Also Read: Michael Saylor Hints at Another Massive Bitcoin Buy After $1B Raise
Summary
Michael Saylor’s Strategy launched the STRC IPO, targeting $500 million through flexible preferred shares with a 9% dividend. The offering is part of a broader push to grow its Bitcoin reserves, supported by major investment banks and strong recent share performance. Strategy’s IPO terms include monthly dividends, strict dividend reduction caps, and redemption provisions.
FAQs
1. What is the Strategy IPO offering?
The Strategy IPO offers STRC preferred shares with a 9% dividend, adjustable monthly, and aims to raise $500 million.
2. How does the dividend adjustment work?
The strategy may change the rate monthly but cannot reduce it by more than 0.25% per year or one month’s SOFR.
3. What makes STRC different from previous preferred stock?
STRC has cumulative dividends, flexible rates, and redemption rights at $101 after listing on major stock exchanges.
4. How does Strategy plan to use the raised capital?
Strategy intends to use the funds to buy more Bitcoin, continuing its corporate treasury-focused BTC acquisition strategy.
5. Who is handling the IPO deal?
Barclays, Moelis & Co., TD Securities, and Morgan Stanley are jointly managing Strategy’s IPO process.
Glossary of Key Terms
Strategy IPO – The public offering of Strategy’s preferred shares (STRC) aimed at raising capital to acquire Bitcoin.
STRC – Series A Perpetual Stretch Preferred Stock with flexible dividend terms.
Cumulative Dividend – A policy requiring all unpaid dividends to be paid before future changes or redemptions.
SOFR – Secured Overnight Financing Rate, a benchmark interest rate for variable-rate securities.
Redemption Rights – Strategy’s ability to buy back preferred shares at a set price under certain conditions.
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