Michael Saylor's Strategy plans to raise $711 million to fund Bitcoin acquisition

Key Takeaways

• Strategy plans to raise approximately $711 million for Bitcoin acquisitions and working capital.
• The released preferred stock offers a 10.00% dividend rate and redemption rights under certain conditions.

Strategy, the business intelligence firm helmed by Michael Saylor, announced Friday it is expecting to raise approximately $711 million in net proceeds via a ‘Series A Perpetual Strife Preferred Stock’ (STRF) offering, aiming to expand its Bitcoin reserves, which are approaching 500,000 BTC.

Due to increased demand, Strategy has upped its offering from 5 million to 8.5 million shares, now priced at $85 per share. The preferred stock will accumulate cumulative dividends at a fixed rate of 10.00% per annum in the stated amount of $100 per share.

Morgan Stanley, Barclays Capital, Citigroup Global Markets, and Moelis Company are serving as joint book-running managers for the offering. AmeriVet Securities, Bancroft Capital, BTIG, and The Benchmark Company are acting as co-managers, according to the announcement.

The liquidation preference will initially be $100 per share, with adjustments made after each business day based on various factors including the stated amount and recent trading prices.

The company maintains redemption rights for all shares if the outstanding amount falls below 25% of the total shares originally issued, or in case of certain tax events. Holders will have the right to require the company to repurchase shares in the event of a fundamental change.

The stock offering is a key component of Strategy’s ambitious 21/21 plan, which aims to raise $42 billion over three years—$21 billion from equity and $21 billion from fixed-income securities—to aggressively expand its Bitcoin holdings.

Disclosed in the company’s Q3 2024 financial results, the plan is already halfway to its target. Since October 30, 2024, Strategy has steadily accumulated Bitcoin, reaching 246,000 BTC.

Strategy has raised billions through convertible senior notes and other financial instruments, fueling large-scale Bitcoin acquisitions.

The Tysons, Virginia-based firm now holds almost 2.4% of the total Bitcoin supply.