Strive (ASST) plunged 9.75% as debt restructuring plan involving perpetual preferred equity sparks sell-off

Strive (ASST) plunged 9.753% in pre-market trading on January 27, 2026, as investors reacted to its debt restructuring plan involving perpetual preferred equity

The company announced a $150 million upsized offering of its Variable Rate Series A Perpetual Preferred Stock (SATA), priced at $90 per share, to retire Semler Scientific’s $90 million in convertible notes due 2030. The transaction includes direct exchanges of approximately 930,000 SATA shares for convertible debt, with remaining proceeds earmarked for debt repayment and additional bitcoin acquisitions. This approach converts fixed-maturity obligations into perpetual preferred shares, improving leverage metrics but diluting common equity holders

Strive’s strategy—prioritizing equity over debt—could serve as a template for peers with large convertible note burdens, such as Strategy (MSTR), which holds $8.3 billion in similar liabilities. While the SATA offering provides liquidity and seniority over common stock, the 12.25% variable dividend rate and lack of maturity features may deter risk-averse investors. The move also highlights the company’s focus on optimizing balance sheet flexibility in a volatile crypto market

Investors are closely watching whether this capital structure adjustment will stabilize Strive’s market sentiment or accelerate equity dilution. The offering’s inclusion of direct debt exchanges and bitcoin investments underscores the company’s hybrid approach to liquidity and growth. Market participants are also evaluating the long-term implications of perpetual preferred shares, especially given the variable dividend component and potential interest rate sensitivity

Given the high yield on the perpetual preferred shares and the absence of a maturity date, the offering may attract income-oriented investors willing to accept equity dilution. However, the structure could also increase the company’s cost of capital and limit its ability to raise further equity in the future. Analysts remain split on whether this strategy will enhance long-term value or create new financial dependencies