On Tuesday morning, the company presented a new approach to securing funds from capital markets aimed at facilitating further acquisitions of bitcoin (BTC). However, there are signs that Wall Street’s funding avenues may be tightening.
The Perpetual Strife Preferred Stock (STRF) issued by the company boasts a fixed annual cash dividend of 10%, distributed quarterly. If any dividends go unpaid, they will accrue at an additional rate of 1% per year (compounded quarterly) until a maximum of 18% is reached. The first dividend payout is set for June 30, 2025.
In contrast, the company’s earlier preferred series (STRK) featured a lower interest rate of only 8%. Moreover, its series of convertible debt offerings had either minimal or nonexistent interest rates, distinguishing them from preferred stock.
Unlike common stockholders, STRF owners lack voting rights but enjoy preferential treatment during liquidation, with a $100 per share liquidation preference. The company can opt to redeem STRF if fewer than 25% of the original shares remain outstanding, or if specific tax-related events arise, while investors can initiate a buyback in the event of a fundamental company change.
STRF is anticipated to begin trading on Nasdaq within 30 days of its issuance, presenting investors with an opportunity to gain bitcoin exposure through a high-yield format. Major financial institutions, including Morgan Stanley, Barclays, Citigroup, and Moelis & Company, are acting as joint book-running managers for this offering under an SEC shelf registration.
Despite rapid bitcoin acquisitions over recent months, the company’s fundraising and token purchasing activities have noticeably slowed in the past few weeks. While there were some additional bitcoin purchases last week, they were minimal—only 130 BTC for $10.7 million—bringing total holdings to 499,226 tokens.
In early trading on Tuesday, shares were down 5%, coinciding with a general market downturn and a drop in bitcoin’s value to $81,300 from $84,000 just a day prior.