The 10.00% Series A Perpetual Preferred Stock (STRF) from Strategy has been successfully priced, with a planned issuance of 8.5 million shares at $85.00 per share.
This is a very healthy increase from the initial offering size of $500 million, which later grew to $722.5 million, thanks to investor demand. The stock is expected to commence trading—an event some see as highly anticipated—on March 25, 2025.
Contents [hide]
Increased Offering Size Reflects Strong Demand
The decision to increase the size of the offering was based on overwhelming investor interest and possible increased demand. This prompted the company to revise the size of the Series A Perpetual Preferred Stock issuance from the initially stated target of $500 million to a final amount of $722.5 million. This move seems to indicate strong investor confidence in the company and, particularly, in the very stable Perpetual Preferred Stock.
Strategy announces pricing of its Strife Perpetual Preferred Stock ($STRF) Offering and upsizes the deal from $500M to $722.5M $MSTR https://t.co/GJVCRwIQ0Y
— Michael Saylor⚡️ (@saylor) March 21, 2025
Every share of Series A Perpetual Preferred Stock will be priced at $85.00, with the company planning to issue a total of 8.5 million shares. The offering is expected to close on March 25, 2025, pending customary closing conditions. A purchase in this offering gives the right to receive a fixed dividend rate of 10.00% annually, which is paid in regular intervals on a quarterly basis.
This fresh offering is part of the Strategy’s broader push to build up its capital base in order to fund any number of strategic initiatives. Notably, the company has said it will direct the proceeds toward general corporate purposes, which include buying more bitcoin and maintaining continuity on the strategic assets it has already acquired, of which more than $2 billion worth is in the form of bitcoin at this point.
A Strategic Move in the Digital Asset Space
By acquiring bitcoin, the company shows that it is serious about stepping up its presence in the vastly expanding market for digital assets. Meanwhile, of course, bitcoin itself is becoming more popular as a store of value and an inflation hedge—options that rising numbers of both retail and institutional investors see as very attractive. Despite recent ups and downs, the digital currency has proven its resilience. Increasing adoption of bitcoin by institutions, not to mention the enthusiasm of retail investors, makes it seem an even likelier bet for the future.
By offering Series A Perpetual Preferred Stock, Strategy is not just raising capital; it is also appealing to an expanding investor profile that favors high-yielding, stable income-producing investment opportunities. The 10.00% dividend attached to the preferred stock is expected to allure yield-hungry investors who are hunting for something—anything—that can give them reliable returns; and Alternative #1 would fit that bill quite nicely.
Alongside its digital asset strategy, the money secured will bolster the firm’s ongoing working capital, a life-sustaining elixir that, in this case, enables not just operational flexibility, but also the preservation of an average 2.5-year runway before the next financing event in which the firm has to get its act together to avoid an in-question pathway toward profitability. A diversified approach toward capital allocation is one sign of long-term success in both traditional and emergent digital currency markets.
Financial Details and Expected Use of Proceeds
Strategy estimates that it will net approximately $711.2 million from the offering, after deducting underwriting discounts, commissions, and offering expenses. This hefty amount will be applied to general corporate uses as previously specified.
These uses include the purchase of bitcoin and other activities that beef up working capital:
1. Buying bitcoin.
2. Non-bitcoin-related working capital uses.
3. More buying of bitcoin.
Issuing perpetual preferred stock is a strategic move by the company, enabling it to raise funds without resorting to traditional debt. That kind of debt often comes with strict covenants and repayment terms. The preferreds have no maturity date; the company pays dividends on them as long as it sees fit. From the standpoint of the capital structure, this is pay-as-you-go financing. It enables the company to maintain greater flexibility and financing, for instance, usually allows for the deductibility of interest payments but not for dividend payments. And preferred stock typically doesn’t have a fixed call date.
The offering is well-timed to coincide with a swelling of investor interest in alternative assets, among which digital currencies are numbered. This positions Strategy to capitalize on present market conditions. Its ability to tap into the capital markets while also securing a stable and long-term funding source bodes well for the company’s growth profile.
Conclusion
The upcoming issuance and successful pricing of Strategy’s Series A Perpetual Preferred Stock mark a significant step forward for the company. They are following planned and not unexpected steps that any finance-savvy company would pursue if it wanted to raise funds visibly and at manageable costs.
SEC registration. Check.
Prospectus filed. Check.
Investor roadshow conducted. Check.
Offering upsized. Check. (Reflects healthy investor confidence in company’s long-term strategy.)
Offering settles. Check. (Funds arrive in Stellar’s coffers.)
Strategy now has its Series A in the rearview mirror and plans in place to do something alleged to be interesting with the new funds. What will it do? And will it succeed in
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news!
Image Source: loft39studio/123RF // Image Effects by Colorcinch
