Strategy Raises $4.2 Billion for Bitcoin Purchases After $14 Billion Gain

Strategy, formerly known as MicroStrategy, has announced a significant capital raise of $4.2 billion through an at-the-market (ATM) offering of its 10.00% Series A Perpetual Stride Preferred Stock. This move comes on the heels of a remarkable $14 billion unrealized gain on its Bitcoin holdings during the second quarter of the year. The company plans to use the net proceeds from this offering for general corporate purposes, including the acquisition of more Bitcoin and for working capital. Additional uses may include dividend payments on its other preferred stock classes.

The ATM sales will occur over an extended period, depending on market conditions. Under the terms of the sales agreement, the preferred stock may be sold by agents in transactions deemed “at the market offerings” under U.S. Securities and Exchange Commission (SEC) rules, or through other methods permitted by law, including negotiated deals or block trades. This structure provides Strategy with the flexibility to raise capital incrementally and opportunistically, adapting to market demand and price dynamics.

This funding mechanism supports Strategy’s ongoing capital markets activity. In the second quarter alone, the company received nearly $6.8 billion in net proceeds from related equity offerings, including a $979.7 million underwritten sale of STRD Stock on June 10, and contributions from existing STRK and STRF ATM programs. As of June 30, Strategy held 597,325 BTC acquired at an aggregate purchase price of $42.4 billion, with an average cost basis of $70,982 per bitcoin. The unrealized gain on digital assets for the second quarter was $14.05 billion, boosting the digital asset carrying value to $64.36 billion.

Strategy's decision to pause its weekly Bitcoin purchases and focus on a share sale is a strategic move that reflects the firm's long-term vision and commitment to the digital asset. The $14 billion gain reported during the second quarter is a testament to the firm's successful investment strategy and its ability to navigate the cryptocurrency market effectively. By increasing its Bitcoin holdings, Strategy aims to position itself as a leader in the corporate adoption of cryptocurrency, sending a strong signal to the market about its confidence in the future of the digital asset.

The $4.2 billion share sale is part of a broader strategy to raise capital for Bitcoin acquisitions. The proceeds from the sale will be used to purchase additional Bitcoin, further strengthening the firm's position in the cryptocurrency market. This move is expected to attract the attention of other corporations considering similar strategies, potentially leading to increased institutional investment in Bitcoin.