tl;dr
Strategy, formerly known as MicroStrategy, plans to raise up to $500 million through a new offering to buy more Bitcoin. The company will issue a new form of perpetual preferred stock called Strife, costing $100 per share with a fixed 10% interest rate, payable only in cash. This is distinct from th...
Strategy, formerly known as MicroStrategy, is planning to raise $500 million through a new offering to buy more Bitcoin. The company will introduce a distinct form of perpetual preferred stock called Strife for institutional investors, paying a fixed 10% interest.
Despite a recent 0.026% increase in its Bitcoin holdings, Strategy's stock price dropped by 6.5% when markets opened. This reflects a 5.5% decrease on the year but a doubling in value over the past six months.
Strategy will issue Strife, costing $100 per share with a fixed 10% interest rate, payable only in cash, which is distinct from the company's previous perpetual preferred product, Strike, offering an 8% dividend in January. The recent purchase of around $10.7 million worth of Bitcoin increased Strategy's Bitcoin stash by approximately 0.026%. Despite the drop in stock price, Strategy shares have doubled in value over the past six months.
Co-founder Michael Saylor noted Bitcoin's recent price drop and expressed optimism about its future performance. Strategy's new stock, available only to institutional investors, would pay its first dividend in around 100 days. The distinct feature of the Strife offering compared to Strike is that its dividend is only payable in cash.
Strategy was able to raise billions of dollars last year by selling stock and convertible bonds, offering 0% interest. In contrast, the Strife offering pays 10% interest, which is more than the 8% dividend for Strategy’s Strike offering in January. Despite market conditions making it harder for the company to raise cash to buy Bitcoin, analysts believe there's no indication Strategy’s Bitcoin purchases will cease soon. The company's stock price has fallen 5.5% on the year but has doubled in value over the past six months.
Speaking at Future Proof Citywide in Miami, Strategy co-founder and Executive Chairman Michael Saylor noted Bitcoin’s recent price drop and the impact of global economic factors, expressing confidence in Bitcoin's future performance.