Strategy Plans $500M IPO (STRC) to Boost Bitcoin Holdings
Michael Saylor's Strategy (formerly Microstrategy) is seeking new ways to fund its Bitcoin acquisitions, with an initial public offering (IPO) as the latest strategy. According to a press release, a Strategy STRC IPO is anticipated, pending favorable market conditions.
Strategy STRC IPO: Offering 5 Million Shares
Strategy has announced an upcoming IPO to raise capital for further Bitcoin purchases. The company plans to offer 5 million shares of Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) to investors, priced at $100 per share, aiming to raise $500 million.
The company intends to allocate the funds to Bitcoin acquisitions and for general corporate purposes.
Strategy plans to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin and for working capital.
This announcement follows Strategy’s recent Bitcoin purchase, increasing its holdings to 607,770 BTC. The STRC IPO launch is contingent on market conditions, expanding Strategy’s preferred stock options.
Indirect Bitcoin Exposure Through New Preferred Stock
The new Perpetual Preferred Stock, named Stretch, will distribute monthly dividends at a variable rate. The initial monthly dividend rate is set at 9.00% annually, with Strategy retaining the discretion to adjust this rate.
Strategy's ability to reduce the monthly dividend is restricted. The company cannot decrease the monthly dividend rate by more than 25 basis points plus any increase in the secured overnight financing rate.
Strategy reserves the right to redeem outstanding STRC stock shares at any point after its listing on a global stock exchange. The redemption price is fixed at $101 per share, along with any unpaid dividends up to the redemption date. The liquidation preference for the STRC stock will start at $100 per share.
Morgan Stanley, TD Securities, and Barclays will act as joint book-running managers for the Strategy STRC IPO. Following the announcement, MSTR stock saw an increase of nearly 1%, trading at $426.28. Strategy currently holds an unrealized Bitcoin gain of $14 billion, solidifying its position as a leading corporate adopter of cryptocurrency.