EddieJayonCrypto
21 Mar 25
Strategy, formerly known as MicroStrategy, has raised over $700 million through a preferred stock offering to buy more Bitcoin. The sale of 8.5 million shares of its Series A Perpetual STRF Preferred Stock, priced at $85 each with a 10% annual dividend, exceeded its $500 million target. This new off...
Strategy, formerly known as MicroStrategy, has successfully raised over $700 million through a preferred stock offering to expand its Bitcoin holdings. The sale of 8.5 million shares of its Series A Perpetual STRF Preferred Stock, priced at $85 each with a 10% annual dividend, exceeded its $500 million target. Notably, this new offering does not allow conversion into common shares, unlike the previous one.
However, concerns have been raised regarding the company's ability to manage long-term obligations amidst its aggressive Bitcoin accumulation, leading to limited liquidity. With over 499,000 BTC worth over $40 billion, Strategy's decision to avoid selling holdings has impacted its cash ratio, which has fallen from 2.10 in 2019 to just 0.11 in 2024. Despite this, Bitwise suggests strategies such as lending Bitcoin and using covered call options to enhance the firm's cash flow.
Bitwise also highlighted that the recent implementation of FASB would allow Strategy to report its Bitcoin holdings at their fair market value, leading to more transparent financials and reduced earnings volatility.