Strategy Boosts Bitcoin Holdings with $1 Billion Preferred Stock Offering

Strategy, the company formerly known as MicroStrategy, has significantly increased its offering of perpetual Stride preferred stock, or STRD, from $250 million to $1 billion. This move is part of the company's strategy to bolster its Bitcoin holdings. The preferred stock will pay investors a 10% non-cumulative dividend and will be offered to the public at $85 per share. The proceeds from this offering, amounting to $979 million, will be used to purchase more Bitcoin, adding to the company's existing stockpile.

STRD is the third form of preferred stock issued by Strategy this year, following the STRF and STRK products. Each of these offerings has distinct features and benefits, including redemption options and the ability for dividends to accrue. Initially, Strategy planned to offer STRD at $100 per share. Unlike the STRF offering, which also pays a 10% quarterly dividend, STRD does not allow for the accrual of missed dividend payments. Additionally, STRD does not provide the option for investors to convert the preferred stock into common shares at a later date. STRD is non-callable for life, meaning it has no associated maturity date.

Michael Saylor, the co-founder and Executive Chairman of Strategy, described STRD as a high-yield credit instrument. In a video shared on X, Saylor explained that compared to STRK or STRF, STRD is designed to be a higher-yielding preferred instrument. He also shared a graphic indicating that STRD, listed on the Nasdaq, has limited sensitivity to Bitcoin's price. In terms of seniority, STRD investors rank behind STRF and STRK holders but ahead of common shareholders. Saylor emphasized that STRD represents the fourth gear in the company's Bitcoin engine, aimed at generating BTC torque through strategic management of its at-the-money offering programs.

As of the latest update, Strategy holds 580,995 Bitcoin, valued at approximately $60.9 billion. The current price of Bitcoin is around $104,638, showing stability over the past 24 hours after a brief dip below $101,000. This strategic move by Strategy underscores its commitment to increasing its Bitcoin holdings and leveraging its financial instruments to drive growth in the cryptocurrency market.