Strategy Raises $723M in Stock Offering to Boost Bitcoin Holdings

Michael Saylor, the CEO of Strategy, a software intelligence company, has announced that the firm has increased its latest offering of Strife perpetual stock to $723 million. This move is part of the company's strategy to bolster its Bitcoin holdings, which are approaching 500,000 BTC. The offering consists of 8,500,000 shares of 10% Series A Perpetual Strife Preferred Stock, priced at $85 per share, with an expected closing date of March 25.

Initially, Strategy aimed to raise $500 million from this stock sale. However, due to increased demand, the offering was expanded to $722.5 million. The company plans to use $711.2 million of the net proceeds to purchase more Bitcoin, the world's largest cryptocurrency by market capitalization. With the current holdings of 499,226 BTC, valued at over $41 billion, this additional purchase will push Strategy's Bitcoin stockpile well above the 500,000 mark, representing nearly 2.4% of Bitcoin’s total 21 million supply.

The Strife offering is exclusively available to institutional investors and will pay quarterly dividends starting on June 30. Unlike Strategy’s other perpetual preferred product, STRK, the new offering’s dividend is payable only in cash. However, the company has the right to delay dividend payments, with unpaid dividends accumulating and compounding at an increasing rate of up to 18% per annum. Strategy retains redemption rights for all shares if the outstanding amount falls below 25% of the total shares issued initially, or in case of certain tax events. In the event of a “fundamental change,” holders will have the right to require the company to repurchase their shares at the indicated amount.

The Strife offering is a crucial part of Strategy’s “21/21 plan,” which aims to raise $42 billion in equity offerings and fixed-income securities to fund its aggressive Bitcoin buying spree. Michael Saylor, a prominent advocate for Bitcoin, has emphasized Strategy’s long-term commitment to holding its Bitcoin stack. Speaking at a recent event, Saylor noted the recent downturn in Bitcoin's price, attributing it to changing rate cut expectations, economic concerns, and other macroeconomic factors. He believes that when these conditions improve, Bitcoin will experience significant growth.

Strategy remains the largest corporate holder of Bitcoin, with unrealized profits of about $8 billion on its Bitcoin investments despite the recent price drop. Saylor is confident in Bitcoin's future, predicting that it will reach $13 million by 2045, with $3 million being a conservative estimate. This strategic move by Strategy underscores the company's unwavering belief in Bitcoin as a long-term investment and its commitment to expanding its holdings in the cryptocurrency market.