Strategy Launches $21 Billion ATM Program for Bitcoin Expansion

Strategy, a leading enterprise analytics software provider, has recently announced a significant financial initiative with the launch of a $21 billion At-The-Market (ATM) program. This program allows the company to issue and sell shares of its 8.00% series A perpetual strike preferred stock, with an aggregate offering price of up to $21 billion. The perpetual strike preferred stock is convertible into shares of Strategy’s class A common stock, offering holders the flexibility to convert their investments into equity.

The company plans to sell these shares in a disciplined manner over an extended period, taking into account the trading price and trading volumes of the perpetual strike preferred stock at the time of sale. The net proceeds from this ATM Program are intended to be used for general corporate purposes, including the acquisition of bitcoin and for working capital. This move underscores Strategy's commitment to leveraging its financial resources to expand its bitcoin holdings, which it has adopted as its primary treasury reserve asset.

The perpetual strike preferred stock can be sold by agents through various methods, including at-the-market offerings, negotiated transactions, or block trades, subject to the terms and conditions of the Sales Agreement. The sale of these shares is being offered pursuant to a prospectus supplement filed with the Securities and Exchange Commission, which became effective on January 27, 2025.

Investors have expressed concerns about the potential impact of this large offering on the market. There are fears that the company might flood the market with new preferred securities, which could lead to a selloff and pressure on the stock price. Additionally, the large offering size and the potential dilution for existing shareholders upon preferred stock conversion are significant considerations. The high yield of almost 9.5% on the preferred stock has also raised questions about the premiums and costs associated with such an offering.

Strategy's decision to issue $21 billion in preferred stock is a bold move that highlights the firm's financial robustness and its readiness to take calculated risks. The company's strategy of accumulating bitcoin and advocating for its role as digital capital is designed to provide investors with varying degrees of economic exposure to bitcoin. This move is part of a broader vision to integrate analytics expertise with a commitment to digital asset growth, positioning Strategy as a leader in both the digital asset and enterprise analytics sectors.

The company's forward-looking statements indicate that actual results may differ materially from those indicated by such statements due to various important factors, including market conditions and other risks discussed in Strategy’s Annual Report on Form 10-K. The company specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.