- Strategy plans to raise $21B via STRK preferred stock to fund Bitcoin purchases.
- MSTR stock remains under pressure, down 5% pre-market.
- Bitcoin briefly hit $84K, while whales accumulated 22K BTC in 72 hours.
Strategy, formerly known as MicroStrategy, has announced plans to raise up to $21 billion through the sale of its 8% Series A perpetual strike preferred stock (STRK), according to a prospectus filing with the Securities and Exchange Commission. The money raised will be used by the business to fund its overall operations and buy more Bitcoin, Strategy said in a statement on Monday. Even with this significant development, MSTR’s stock is still under pressure and is down in pre-market trade.
Planned Stock Sales to Be Executed Gradually
The preferred stock offering will be sold in phases through at-the-market sales, negotiated transactions, or block trades. Each share of STRK is set at a liquidation preference of $100 and carries a fixed 8% annual dividend. These dividends will be paid quarterly, subject to board approval. Unlike traditional debt instruments, perpetual preferred stock has no maturity date and continues paying dividends indefinitely.
Strategy emphasized that the issuance of STRK preferred stock will occur in a “disciplined manner” over an extended period. The company will consider trading price and volume when determining the timing of sales. The strategy’s staged approach is in line with its larger “21/21 plan,” which aims to raise $42 billion through equity and fixed-income sales in order to maintain financial stability and increase its Bitcoin holdings.
According to current market pricing, the company’s current holdings of 499,096 BTC are worth about $41 billion. Its average purchase price stands at $66,357 per BTC, amounting to a total investment of $33.1 billion. Despite its aggressive Bitcoin strategy, Strategy disclosed in its latest 8-K filing that no additional shares of class A common stock were sold under its existing at-the-market equity program for Bitcoin acquisitions in the past week.
Market Reactions and Investor Sentiment
Bitcoin temporarily rose to $84,000 after the announcement before leveling out. Strategy’s stock, however, had trouble gaining traction; in pre-market trading, MSTR fell more than 5%. Over the past month, MSTR has declined by over 14%, reflecting investor caution despite the company’s continued push for Bitcoin accumulation.
Crypto market analysts noted that institutional investors and whales have used recent price dips as an opportunity to accumulate Bitcoin. Reports indicate that large holders acquired over 22,000 BTC within the last 72 hours, a trend that aligns with Strategy’s ongoing investment strategy.
Strategy’s $21 billion capital raise through STRK preferred stock underscores its unwavering commitment to Bitcoin investment. The company remains focused on expanding its cryptocurrency portfolio while balancing financial flexibility. Market participants will closely monitor its execution of the stock offering and its impact on both Bitcoin and Strategy’s stock performance.
