Strategy Raises $2.8B Through Preferred Stock for Bitcoin Acquisition

Strategy, the company led by Michael Saylor, increased its Series A Perpetual preferred stock offering from $500 million to $2.8 billion to fund additional Bitcoin purchases for its corporate treasury. The offering, dubbed ‘Stretch,’ represents a 460% increase from the original target.

The upsized $2.8 billion offering will issue approximately 31.11 million shares at $90 per share, compared to the original 5 million shares planned. The shares carry a 9% annual dividend and will trade under ticker STRC on Nasdaq, with cumulative dividends linked to the one-month SOFR rate. Morgan Stanley, Barclays, TD Securities and Moelis & Co serve as joint book-runners.

Stretch represents the fourth preferred equity transaction under Saylor’s capital plan, following earlier offerings named Stride, Strike and Strife. The structure sits on top of over $120 billion in common equity and approximately $71 billion in unencumbered Bitcoin holdings. The plan aims to replace out-of-the-money convertible debt with permanent capital and reduce future redemption obligations.

Unlike standard preferred shares with fixed coupons, Stretch has variable monthly dividends designed to keep its share price near par value. The company may adjust the monthly dividend rate, but reductions are limited to 25 basis points plus any decline in the one-month SOFR rate from the previous period.

Strategy, formerly called MicroStrategy, shifted to a Bitcoin-first treasury approach in 2020. Since then, it funded crypto purchases through equity raises, preferred stock offerings and debt. The company bought 6,220 Bitcoin for $740 million during the week ending July 20. Total holdings now stand at 607,770 BTC, worth around $71 billion at current prices.