Michael Saylor’s Strategy set to raise $711 million to fund Bitcoin acquisition

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Key Takeaways

Strategy plans to raise approximately $711 million for Bitcoin acquisitions and working capital.
The released preferred stock offers a 10.00% dividend rate and redemption rights under certain conditions.

Strategy, the business intelligence firm helmed by Michael Saylor, announced Friday it is expecting to raise approximately $711 million in net proceeds via a ‘Series A Perpetual Strife Preferred Stock’ (STRF) offering, aiming to expand its Bitcoin reserves, which are approaching 500,000 BTC.

Due to increased demand, Strategy has upped its offering from 5 million to 8.5 million shares, now priced at $85 per share. The preferred stock will accumulate cumulative dividends at a fixed rate of 10.00% per annum in the stated amount of $100 per share.

Morgan Stanley, Barclays Capital, Citigroup Global Markets, and Moelis & Company LLC are serving as joint book-running managers for the offering. AmeriVet Securities, Bancroft Capital, BTIG, and The Benchmark Company are acting as co-managers, according to the announcement.

The liquidation preference will initially be $100 per share, with adjustments made after each business day based on various factors including the stated amount and recent trading prices.

The company maintains redemption rights for all shares if the outstanding amount falls below 25% of the total shares originally issued, or in case of certain tax events. Holders will have the right to require the company to repurchase shares in the event of a fundamental change.