Bitcoin News Today: Strategy Quadruples Preferred Stock Offering to $2 Billion for Bitcoin Treasury Expansion

Michael Saylor’s corporate entity, Strategy, has significantly expanded its preferred stock offering to $2 billion, a quadrupling of its initial $500 million target, to bolster its Bitcoin treasury. The move, disclosed by Bloomberg, reflects heightened investor demand for exposure to Bitcoin through conventional financial instruments. The new offering, labeled “Stretch” (STRC), will issue 5 million shares at a discounted price of $90 each, despite being senior to prior preferred stock classes like Strike and Stride but junior to Strife securities and convertible bonds. The shares feature adjustable dividend rates tied to the one-month SOFR and cumulative dividend structures, offering flexibility for Strategy to respond to market conditions [1].

Strategy’s aggressive accumulation strategy has been a defining feature of its operations. The company currently holds 607,770 BTC, valued at approximately $43 billion, and has consistently allocated capital from debt and equity offerings to expand its Bitcoin reserves. Recent transactions include a $472.5 million at-the-market equity raise that added 4,225 BTC to its holdings. The funds from the Stretch offering will be directed toward further Bitcoin purchases, reinforcing Strategy’s position as the world’s largest corporate Bitcoin treasury [1].

The offering process involves major financial institutions, including Morgan Stanley, Barclays, Moelis & Co., and TD Securities. Bloomberg reported that the pricing of Stretch shares will finalize on Thursday afternoon in New York, with the firm anticipating robust investor participation. This marks Strategy’s fourth preferred equity product, following STRD, STRF, and STRK, each designed to diversify capital sources while maintaining its Bitcoin-centric approach [1].

However, the company faces a legal challenge following the launch of the Stretch offering. A Delaware court case, filed by plaintiff David Dodge, alleges violations of corporate governance laws related to amendments to the Series A Perpetual Strike Preferred Stock (STRK). The lawsuit claims the board altered STRK’s liquidation preference without shareholder approval, potentially breaching fiduciary duties. While Strategy maintains it cannot yet assess the litigation’s financial impact, the firm’s stock (MSTR) has remained resilient, trading near $413 and reflecting a 37% year-to-date gain alongside Bitcoin’s price trajectory [1].

Market analysts have closely tracked Strategy’s influence on Bitcoin’s institutional adoption. The firm’s strategy of leveraging financial instruments to accumulate Bitcoin has inspired other companies to adopt similar approaches, amplifying demand for the cryptocurrency. Despite the legal uncertainties, Strategy’s stock has demonstrated stability, with shares surging 146% over the past 12 months. The company’s latest raise underscores its commitment to positioning Bitcoin as a core treasury asset, aligning with broader trends of institutional capital flowing into the digital asset class [1].

The Bloomberg report highlights Strategy’s ability to adapt to evolving investor preferences while navigating regulatory and market risks. By issuing flexible preferred stock structures, the firm balances its Bitcoin acquisition goals with shareholder interests. However, the legal dispute over governance practices underscores the complexities of managing a capital-intensive strategy in a rapidly changing regulatory environment. Investors will likely monitor the court’s ruling on the STRK amendment and its implications for future capital-raising activities [1].

Source: [1] [Michael Saylor’s Strategy Boosts Bitcoin War Chest With $2B Raise – Bloomberg] [https://cryptonews.com/news/michael-saylors-strategy-boosts-bitcoin-war-chest-with-2b-raise-bloomberg/]