Strategy, led by Michael Saylor, has announced a funding round, raising $722 million through the sale of its Series A Perpetual Strife Preferred Stock (STRF). The company plans to use the proceeds to further expand its Bitcoin holdings.
This marks another move in Strategy’s ongoing effort to increase its Bitcoin reserves, a strategy led by its CEO, Michael Saylor, who has a bullish stance on cryptocurrency.
Strategy Funding: Michael Saylor Raises $722 Million
Strategy initially aimed to raise $500 million by issuing 8.5 million shares of its Series A Perpetual Strife Preferred Stock at a price of $85 per share. However, due to the increased interest in the particular offering, the company increased its sales and was able to float $722 million.
The additional funds will be used mainly to buy more bitcoins, thus staying true to Strategy’s Bitcoin investment strategy.
The sale of the preferred stock enables Strategy funding to proceed with the Bitcoin buying strategy recommended by Michael Saylor. Currently, the company holds in its balance more than 499,200 Bitcoins that cost more than $33 billion. By the end of this new round of the Strategy funding cycle, the company would control more than 500,000 Bitcoins.
Preferred Stock Features and Dividend Structure
The Series A Perpetual Strife Preferred Stock, offers dividends at a rate of 10% annually, which was more than what has been provided by the company in the first two offerings. There are no conversion features provided to convert the stock into common stock.
Instead, the preferred stock, has a feature where it has cumulative dividends and these are to be paid on a quarterly basis. These are accumulated on a compounded basis which makes them vulnerable to be accrued at a higher rate depending on the time of issue.
The proceeds from the sale will be used for general corporate purposes, including Bitcoin acquisitions and working capital needs. Michael Saylor, Strategy’s CEO, has made it clear that the company’s focus on accumulating Bitcoin is central to its long-term strategy concurrent with the US Bitcoin Strategy. The higher dividend rate is intended to attract investors while allowing Strategy to continue building its position in Bitcoin.
Strategy’s Ongoing Commitment to Bitcoin
Michael Saylor’s strategy of using corporate funds to acquire Bitcoin has been a central theme of Strategy’s business model since 2020. The company has made multiple large Bitcoin purchases, with the latest addition of 130 BTC earlier this week. Strategy’s Bitcoin strategy has made it a leader in corporate adoption of cryptocurrency as a reserve asset.
Under Saylor’s leadership, the company has transitioned from offering convertible senior notes to issuing preferred stock as a way to fund its Bitcoin purchases. This shift is seen as a way for Strategy funding to continue accumulating Bitcoin without taking on the same level of debt associated with previous fundraising methods.
Strategy’s Bitcoin holdings continue to grow, and the company is expected to purchase Bitcoin regularly, with plans to make new acquisitions at least twice a month. With the added capital from the recent offering, Michael Saylor and Strategy are poised to further cement their place in the cryptocurrency market. As Strategy’s Bitcoin holdings approach 500,000 tokens, the company’s influence on the Bitcoin market and its potential for future growth remains significant.
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