Strategy (formerly known as MicroStrategy) has unveiled plans to raise $21 billion through its Series A preferred stock (STRK) to acquire more Bitcoin.
According to a March 10 statement, the company had entered a sales agreement to issue and sell shares of its 8.00% Series A perpetual strike preferred stock at the market (ATM). The shares will be priced at $0.001, with the total offering capped at $21 billion.
Investors holding STRK can exchange their shares for Class A common stock, although this will be subject to specific conditions.
Strategy stated that sales under the ATM Program will be conducted gradually, considering factors such as trading volume and price fluctuations.
Understanding STRK
STRK is a perpetual preferred stock that provides additional liquidity for Strategy’s Bitcoin acquisition plans.
Unlike bonds with fixed maturity dates, perpetual preferred stocks do not have a redemption period. Instead, STRK offers an 8% annual dividend as long as the company remains operational.
Since introducing this financial instrument in January, Strategy has already raised over $584 million through its convertible preferred stock offering.
The company also claims STRK has been the past decade’s highest-performing and most liquid preferred stock.
Bitcoin purchases
Meanwhile, the company intends to use the net proceeds from the ATM Program for general corporate purposes, including acquiring more Bitcoin.
This move aligns with Strategy’s ongoing approach to strengthening its Bitcoin position through multiple financial mechanisms, including equity financing, debt issuance, and operational cash flows.
On Feb. 24, the firm made its most recent Bitcoin purchase, adding 20,356 BTC for approximately $2 billion. This pushed its total Bitcoin holdings to 499,096 BTC, valued at over $47 billion.
Since launching its Bitcoin accumulation strategy under Michael Saylor’s leadership, Strategy has spent $33.1 billion, including fees, at an average purchase price of $66,357 per BTC.
Despite the latest fundraising effort, Strategy’s stock has faced downward pressure. According to Google Finance data, MSTR is trading at $252.48 after a 12% decline the past day.
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