MicroStrategy, now operating under the name Strategy, announced plans to issue and sell up to $2.1 billion worth of its 10.00% Series A Perpetual Strife Preferred Stock (ticker: STRF) listed on Nasdaq. The offering will be conducted over time, dependent on market conditions, through a sales agreement with TD Securities, Barclays Capital, and The Benchmark Company acting as sales agents.
The net proceeds from the sale are intended to be used for general corporate purposes, which may include working capital and more notably, additional acquisitions of Bitcoin (BTC). As of May 21, the preferred stock was trading slightly above its liquidation preference at $100.65. The new shares will be issued on the same terms as the existing 8.5 million shares outstanding, including a cumulative annual dividend of 10% if declared.
This announcement comes amid a Bitcoin price surge, with BTC recently reaching an intraday high of $111,861 and currently trading near $111,000. Strategy holds 576,230 Bitcoin, acquired since August 2020 at an average cost basis of $69,726 per BTC. The current market value of their Bitcoin holdings stands just under $64 billion, approximately 59% above their purchase cost.
Bitcoin remains central to Strategy's financial strategy, constituting over half of the company's $111.4 billion market capitalization. The proceeds from this offering will be used in line with previous capital raises, aimed at expanding their Bitcoin position. There is no fixed minimum sales goal imposed on the agents, who will receive a fee up to 2% of gross proceeds. No funds will be held in escrow, and dividend payments depend on board approval and fund availability.