Strategy, the most substantial corporate Bitcoin investor, announced on Monday its intention to float 2.5 million new perpetual preferred shares, dubbed ‘Stride’ (STRD), to fuel its ongoing Bitcoin acquisition drive.
In an official statement, the company disclosed that “the net proceeds from the offering will be used for general corporate endeavors, including Bitcoin acquisition and working capital maintenance.”
The proposed offering comprises 2,500,000 shares of Strategy’s 10% Series A Perpetual Stride Preferred Stock, targeting “institutional investors and select non-institutional investors”.
Strategy has recently made other preferred shares available to the public, namely Strike (STRK) and Strife (STRF), as part of its $84 billion fundraising initiative (equity and debt combined) to finance prospective Bitcoin purchases. STRK and STRF, providing yields of 13% and 10% respectively, are convertible preferred stocks.
Michael Saylor, Strategy’s co-founder and Executive Chairman, has dubbed Strife and Strike as “the inaugural AI-developed securities.” Both STRD and STRF promise a 10% dividend but are non-convertible into common Strategy shares. The company stated, “STRD Stock holders will receive non-cumulative dividends at an annual rate of 10.00% on the stated amount.”
Unlike bonds, perpetual preferred shares have no mandatory redemption schedule or maturity date. Instead, they offer fixed dividend payments for as long as the issuing company remains operational.
After its latest acquisition, Strategy now holds a total of 580,955 BTC, valued at over $60 billion. The company’s successful Bitcoin stockpiling strategy has inspired many firms to consider becoming cryptocurrency treasury companies. Strategy’s stock has more than doubled in price over the last year as a result of its Bitcoin hoarding plan.
Strategy also detailed the conditions under which it can redeem the STRD shares in its Monday statement. The company reserves the right to redeem all (but not less than all) of the STRD stock, in cash, if the total number of STRD shares is less than 25% of the original issue. Strategy also has redemption rights in the event of specific tax occurrences.
Disclaimer: This article is only for informational purposes and should not be construed as investment, legal, tax, financial, or other advice.
