Strategy1 intends to offer 5 million shares of STRC stock

Strategy1 intends to offer 5 million shares of STRC stock

Strategy, a prominent corporate Bitcoin holder, has announced plans to raise capital through an initial public offering (IPO) of 5 million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC Stock. The offering aims to expand the company's Bitcoin reserves and working capital base [1].

The IPO, which is registered under the Securities Act of 1933, will see Strategy offering 5 million shares of STRC Stock. The proceeds from this offering will be used for general corporate purposes, including the acquisition of Bitcoin and for working capital [1].

According to the company, the STRC Stock will feature cumulative monthly dividends starting at an annual rate of 9.00%. The dividend rate can be adjusted based on one-month term SOFR fluctuations, with the goal of keeping the stock's price at or close to $100 per share. Dividends will be paid in cash and will accrue compounded interest monthly if not paid [1].

Strategy also reserves the right to redeem all or part of the STRC Stock at $101 per share plus any unpaid dividends once listed on Nasdaq or NYSE. Other redemption triggers include a "clean-up" redemption if outstanding shares fall below 25% of the total issued, or a "tax redemption" if certain tax-related events occur. In the event of a "fundamental change," shareholders may require Strategy to repurchase STRC Stock at $100 per share plus accumulated dividends [1].

The IPO is being led by Morgan Stanley, Barclays, Moelis & Company, and TD Securities as joint book-runners, with additional co-managers including The Benchmark Company, Clear Street, AmeriVet Securities, Bancroft Capital, and Keefe, Bruyette & Woods [1].

This announcement comes on the heels of Strategy's acquisition of 6,220 BTC for approximately $740 million between July 14 and July 20, bringing its total holdings to 607,770 BTC—valued around $74.1 billion [1].

References:
[1] https://bitcoinmagazine.com/news/strategy-announces-ipo-of-5-million-strc-stock-to-fund-bitcoin-purchases