Strategy Unveils $4.2 Billion Stock Offering to Boost Bitcoin Holdings

Strategy, formerly known as MicroStrategy, has unveiled a substantial $4.2 billion at-the-market (ATM) stock offering program. The company plans to sell shares of its preferred stock, STRD Stock, gradually over time, depending on market conditions. This initiative is part of Strategy's broader strategy to strengthen its position as a Bitcoin-first company, reward shareholders, and ensure robust corporate growth. The net proceeds from this ATM program will be used for general corporate purposes, including the acquisition of Bitcoin and managing working capital.

The announcement comes after a remarkable second quarter for Strategy, during which the company reported an unrealized gain of $14 billion on its Bitcoin holdings. This substantial gain was driven by a surge in the Bitcoin price, which climbed from $82,000 to $108,000 between April and June. As of July 6, Strategy holds 597,325 BTC, acquired at an average price of $70,982, totaling $42.4 billion in cost basis. This aggressive buying strategy has not only turned previous quarterly losses into significant gains but also validated the company's thesis that Bitcoin outperforms cash.

The $4.2 billion stock offering involves the sale of 10% Series A Perpetual Stride Preferred Stock (STRD) through an ATM program. This move is designed to capitalize on the current market conditions, allowing Strategy to continue acquiring Bitcoin while managing its working capital and potentially paying dividends. The proceeds from this offering will be used to buy more Bitcoin, manage working capital, and potentially pay dividends, aligning with the company's high-conviction, high-leverage playbook.

Strategy's aggressive approach to Bitcoin acquisition is not new. The company has a history of leveraging equity markets to fund its Bitcoin purchases. In the second quarter alone, Strategy raised $6.8 billion in net proceeds, with $5.2 billion coming from common stock programs and nearly $980 million from a previous STRD offering. With a preferred stock portfolio now totaling $3.4 billion and $315 million in annual dividends, the company has ample firepower for future moves. As of the end of the second quarter, Strategy still had over $40 billion in unused ATM issuance capacity across various programs, providing it with the flexibility to continue its aggressive Bitcoin acquisition strategy.

The market's reaction to Strategy's announcement has been mixed. Bulls see this as a strategic move to capitalize on the Bitcoin bull run, while bears warn of potential dilution risks and overexposure to a volatile asset. However, for Strategy and its CEO, Michael Saylor, the play is clear: double down when conviction is high. This latest ATM program is a testament to the company's unwavering belief in Bitcoin as a store of value and its commitment to leveraging equity markets to deepen its exposure to the cryptocurrency.