Strategy has launched a new fundraising plan worth nearly $1 billion, intending to expand its Bitcoin holdings through a public offering of preferred stock. The initiative means four times increase from the previously announced $250 million raise, setting a new path in how the company funds its cryptocurrency acquisitions. Led by Michael Saylor, this move comes shortly after the company confirmed a new Bitcoin purchase, reinforcing its position as the largest corporate Bitcoin holder in the world.
Strategy’s Shift to Preferred Stock for Capital Growth
Strategy’s offering includes 11,764,700 shares of a new class: 10.00% Series A Perpetual Stride Preferred Stock. Each share is priced at $85, bringing the estimated proceeds to $979.7 million after subtracting underwriting and related costs. The company confirmed that the funds will be used for general purposes, with Bitcoin purchases being a central goal.
Strategy has shifted from its usual funding methods – common stock and convertible debt – to issuing preferred stock. The new structure offers a 10% fixed, non-cumulative dividend, targeting institutional investors with consistent income, though missed payments aren’t carried forward.
By issuing preferred shares instead of common stock, the Strategy avoids immediate dilution, which may appeal to long-term investors focused on value retention. This approach raises capital without adding debt or increasing the common shareholder count.
For institutions seeking exposure to Bitcoin without directly purchasing the asset, these shares serve as a potential gateway. The new share class provides them with income and indirect exposure to crypto, aligning with the Strategy’s core focus on digital asset accumulation.
Read also: Major Companies Are Betting Big on Crypto Treasuries
The Funding Could Add 9,250 More Bitcoin
With the new funding plan in place, Strategy has the opportunity to increase its Bitcoin holdings significantly. At the current price of $105,890 per Bitcoin, $979.7 million could buy around 9,250 BTC. This would be a massive leap compared to the company’s most recent purchase of 705 BTC for $75.1 million, made public on June 2.
Strategy’s previous purchases were financed using a combination of MSTR common stock, as well as STRF and STRK shares. The new STRD preferred stock now joins that list, offering an alternative funding method with fixed returns and an appeal to less risk-tolerant investors. There is no set schedule for Bitcoin purchases, meaning the company acts based on the availability of funds and market conditions.
The decision to push for nearly $1 billion in new capital is also a sign that Strategy sees room for expansion in its BTC strategy. The firm continues to grow its portfolio without signaling a slowdown, even as Bitcoin’s price remains volatile. This capital will enable the company to act quickly on favorable pricing or market trends.
Read also: Will Strategy Have to Sell Part of Its Bitcoin Stack?
Strategy’s Bitcoin Premium Hits 112%
According to VanEck, Strategy’s Bitcoin premium has reached 112% over the spot price. This means investors are paying more than double the actual value of the company’s Bitcoin and software assets. The asset manager pointed out that this premium is tied to expectations about future Bitcoin accumulation and other market advantages. 10x Research’s Markus Thielen said:
“Every time MicroStrategy issues new shares to retail investors – shares backed by Bitcoin worth only a fraction of the stock price – the company pockets the difference and frames it as Bitcoin yield.”
This premium-based model has become a key part of the firm’s strategy to benefit from investor enthusiasm around BTC.
Though high, Strategy’s premium is still below that of Japanese firm Metaplanet. On May 27, Metaplanet’s premium rose to $596,154, meaning shares were priced more than five times higher than their actual Bitcoin value. This shows how far investors are willing to go for indirect exposure to Bitcoin through equity.
10x Research has warned that retail investors may not be aware of net asset value (NAV), leading them to overpay for exposure that lacks extra upside. These warnings highlight the risks tied to speculative stock pricing, particularly when linked to Bitcoin rather than traditional operations or income.
Read also: What If MicroStrategy Sold All Their Bitcoins?
STRD Launch Tests Investor Appetite for 10% Yield
After the preferred stock pricing was made public, Strategy’s stock classes responded across the board. MSTR, the company’s common stock, traded at $386. STRF dropped to $100, down from a previous peak of $107. STRK stood at $101.60. These price drops reflect market adjustments, especially as Bitcoin also fell from its earlier record of $111,970 on May 22.
The newly introduced STRD shares are being compared by some to high-risk bonds, often referred to as junk bonds in investment circles. They come with a higher fixed yield but also carry more risk. For investors looking for passive income, the 10% dividend may be attractive despite the associated risk level.
The response to STRD’s launch will offer insight into how much institutional support remains for Strategy’s approach. If the offering sells well, it could indicate that major investors still have confidence in the company’s long-term Bitcoin plan despite short-term volatility.
