Bitcoin investment giant Strategy has revealed plans to raise $21 billion via stock sale as it looks to inject more funds to boost its BTC holdings
Business Intelligence firm Strategy, renowned for its large appetite for Bitcoin (BTC), has revealed plans to acquire more BTC. The Michael Saylor-led firm looks to raise $21 billion through sales of its 8% Series A Perpetual Preferred Stock, STRK.
Strategy and Bitcoin Accumulation Plans
In a filing with the U.S. Securities and Exchange Commission (SEC), Strategy hopes to continue its aggressive Bitcoin accumulation. It hopes to achieve this by consistently selling STRK shares over time via negotiated transactions, at-the-market sales, or block trades.
Strategy, in a Press Release cited by BGECrypto, explained that the proceeds from the sales of STRK would be utilized for general corporate purposes. Chief among these is the acquisition of Bitcoin as working capital.
The business intelligence firm intends to issue 7,300,000 shares of perpetual strike preferred stock. This will have a liquidation preference of $100 per share, and its dividend will accumulate at a fixed rate of 8% annually.
However, Strategy would pay regular dividends to STRK every quarter, as declared by the company’s board of directors. That is, quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, beginning on March 31, 2025.
Analysts consider this move typical of Strategy, which pulled off a similar one in February. They consider it part of the grand plan of investing $42 billion in Bitcoin accumulation over a three-year period.
Notably, Strategy announced a “21/21 plan” stating its intentions to raise $42 billion in equity offerings and fixed-income securities.
Regarding Bitcoin accumulation, Strategy now holds 499,096 BTC, which is valued at approximately $41.71 billion. Analysis shows each BTC acquired by Strategy came for $66,423, giving it an unrealized profit of 25.83%
Perpetual Preferred Stock – a Strategic Approach
For clarity, perpetual preferred stocks are unlike bonds. They do not have a maturity date or obligatory redemption timeline. Rather, Strategy would have to pay the 8% fixed dividends indefinitely as long as it continues to operate.
Holders of these stocks can convert their shares into class A common stock. This can only occur under specific conditions at certain times, and if they do, they might receive cash instead of fractional shares.
However, a clause in the process allows Strategy to repossess all outstanding preferred stock for cash if the cumulative value dips below 25% of the initial issuing amount.
As per TradingView data, STRK is down 6.39% at $86.50. The dip seems to negatively affect the development, although others consider it regular market volatility.
The coming days will determine the general outlook of STRK in the financial market as investors take a stance.
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