Strategy Increases Strife Offering to $723 Million for Bitcoin Acquisition
Strategy has raised its Strife perpetual stock offering to $723 million, aiming to purchase more Bitcoin. The offering features a 10% fixed dividend rate and an $85 per share public price, with dividends starting in June. Despite recent stock price declines, the market value remains significantly higher compared to last year.
Strategy, previously recognized as MicroStrategy, has increased the size of its Strife perpetual stock offering from an initial $500 million to $723 million. The updated offering is set at a fixed rate of 10%, with a public offering price of $85 per share, as detailed in a recent press release. This totals approximately 8.5 million shares of the company’s “preferred strife perpetual stock.”
The sale, anticipated to conclude on March 25, will direct $711 million of the proceeds towards acquiring additional Bitcoin, thereby augmenting its current holdings of 499,226 BTC, valued at around $41.4 billion. It is noteworthy that, unlike previous offerings which allowed conversion to common shares, Strife will provide quarterly cash dividends exclusively.
Dividend payments for the Strife stock are slated to commence in June, obligating Strategy to disburse an estimated $71 million to investors within approximately 100 days. Additionally, the company retains the option to postpone dividend payouts, which could accrue interest at a rate of up to 18% for each missed quarter. The 10% fixed rate is predicated on the shares’ stated amount of $100, as outlined in the initial announcement.
Last year, Strategy garnered billions in Bitcoin investments through stock sales and convertible debt that carries a 0% interest rate. Nevertheless, analysts suggest that with the recent decline in Bitcoin’s price, the company faces increased challenges in raising capital at favorable rates for further acquisitions. Recently, Strategy’s stock fell by 2.5% to $295 shortly after market opening, reflecting a 2% decrease over the past month, though it remains 84% higher compared to the same time last year.
In summary, Strategy’s increased Strife perpetual stock offering represents a significant financial maneuver aimed at expanding its Bitcoin holdings. With a fixed 10% dividend rate and the impending sale settlement, the company seeks to enhance its asset base despite challenges in raising capital amid fluctuating Bitcoin prices. The financial commitment to dividend payouts underscores the strategic approach to attract investors while navigating the complexities of the cryptocurrency market.
Original Source: decrypt.co
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