Strategy Files IPO To Raise $500M For More Bitcoin

Strategy is going back to the market to fund more bitcoin purchases—this time through a fresh preferred stock offering. On Monday, the company announced its plans to launch an initial public offering (IPO) of a new series of preferred shares aimed at raising $500 million before expenses.

Good to know

• Strategy filed to offer 5 million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock.
• Proceeds will go toward general corporate use, mainly more bitcoin purchases.
• The stock will carry a 9% starting dividend rate with monthly payouts.

Labeled as “Stretch Preferred Stock” (STRC), the shares will be issued at $100 par value each. The company says it plans to use the net proceeds to continue building its bitcoin holdings and support general corporate needs like working capital.

This marks the fourth time Strategy has turned to preferred stock offerings to grow its bitcoin treasury. The move follows the firm’s latest acquisition of 6,220 BTC, signaling it remains committed to aggressively adding to its crypto position.

Holders of the STRC shares will earn cumulative monthly dividends starting at an annualized 9% rate. The company will have the flexibility to adjust the rate each month, but only within limits designed to help the stock price stay close to the $100 mark. If dividends are not paid in full during a given period, they will compound on a monthly basis.

Strategy also outlined redemption scenarios in its filing. The company can redeem the shares after listing them on a major exchange, at $101 per share plus any unpaid dividends. It also has the option to redeem in cases involving small outstanding balances or tax-driven situations, with shareholders receiving the liquidation preference and any due dividends.