MicroStrategy Issues Convertible Preferred Stock to Fund Bitcoin Acquisition
MicroStrategy (MSTR), the world’s largest publicly traded corporate holder of Bitcoin (BTC), launched a new stock offering Tuesday to raise funds for further investment in the cryptocurrency.
The company is conducting an initial public offering (IPO) for 5 million shares of Variable Rate Series A Perpetual Stretch Preferred Stock (STRC). This preferred stock has a stated amount of $100 per share.
As per its announcement, net proceeds raised from the offering will be used for “general corporate purposes, including the acquisition of Bitcoin and for working capital.”
The STRC stock offers a variable annual dividend that accumulates cumulatively. The company stated the initial monthly dividend rate will be set at 9%.
Director Michael Saylor issued an announcement via X (formerly Twitter Monday, noting this was a follow-up on the recent July 7th. MicroStrategy revealed a $4.2 billion at-the-market offering aimed at enabling further Bitcoin purchases.
The STRC issuance is intended to encourage trading near its $100 face value. The dividend rate can be adjusted monthly by the company to achieve this, effectively creating a predictable return profile each quarter.
Adam Livingston, described as a “Bitcoin Author,” noted the stock intends to “convert fiat into Bitcoin at velocity,” labeling it a “yield-targeted Bitcoin conduit.” Commenting on its stability, W. Ian Rose, CEO of Metaplanet, characterized higher-tier STRC investors as “capital allocators.”
MicroStrategy III confirmed its continued confidence in Bitcoin’s prospects by executing a substantial purchase of $740 million worth of BTC on Monday, acquired at an average price of $119,000 per coin, shortly before the STRC announcement.
This strategy exemplifies a broader trend by companies aiming to accumulate Bitcoin beyond core technology functions. W. Adam Back, Blockstream co-founder and Hashcash inventor, previously suggested that companies like MicroStrategy are potentially driving Bitcoin’s future market expansion, facilitating its role as a global settlement asset.
