Strategy Plans $2.1 Billion Preferred Stock Sale for Bitcoin Buys

Strategy has announced its intention to issue up to $2.1 billion in Series A Perpetual Preferred Stock, with an annual dividend of 10%. The sale will be conducted gradually through “at-the-market” offerings under SEC Rule 415(a)(4), allowing the company to sell into favorable market conditions or through negotiated block trades. This approach provides Strategy with the flexibility to optimize the timing and terms of the sale.

The proceeds from this sale will be used for general corporate purposes, which may include additional purchases of Bitcoin (BTC). This move aligns with Strategy’s established treasury policy of converting cash into BTC, further solidifying its position as a major holder of the cryptocurrency. As of now, Strategy holds over 214,000 BTC, a record-setting amount.

Unlike previous funding rounds that involved convertible notes, this time Strategy is raising equity-like capital through preferred stock. Preferred stock does not dilute the voting power of common shareholders but functions as a hybrid between debt and equity, offering fixed dividends. In this case, the dividend is set at a notably high 10%, reflecting the current interest rate environment and the perceived risk associated with backing a Bitcoin-heavy corporate strategy.

This financial maneuver is part of a series of strategic moves by Executive Chairman Michael Saylor, who has transformed Strategy into a Bitcoin investment vehicle. By issuing preferred equity instead of traditional debt, the company avoids adding fixed repayment obligations while still accessing billions in potential capital for BTC accumulation. The offering is perpetual, meaning it has no maturity date, and investors will receive dividends indefinitely. This makes it a long-term bet on both Strategy and the future of Bitcoin.

This fundraising effort underscores Saylor’s commitment to Bitcoin. If market conditions are favorable, Strategy is prepared to acquire even more Bitcoin, further cementing its position as a leading corporate investor in the cryptocurrency space. The high dividend rate and the perpetual nature of the preferred stock reflect the company’s confidence in the long-term value of Bitcoin and its strategic importance to the company’s future.