Strategy Launches New STRC Stock to Fund Further Bitcoin Buys
This week, Michael Saylor’s Bitcoin-powered firm, Strategy (formerly known as MicroStrategy), has announced a new stock offering. The company is launching a new security called STRC (“Stretch”), a Perpetual Preferred Stock targeted at select investors. Shortly before this announcement, Strategy acquired another tremendous amount of Bitcoin worth almost one billion dollars.
Strategy’s new preferred stock to fund Bitcoin buys
This is the most recent addition to the list of other similar preferred stocks – STRK, STRF, and STRD – which allow Strategy to raise cash to fund its further Bitcoin accumulation. This move enables Strategy to raise additional capital without issuing more debt or regular MSTR shares.
Like other similar products issued by Strategy before, STRC offers a 10% annual dividend, which is to be paid out every quarter, and a $100 face value with liquidation preference, according to the press release published by Saylor earlier this week.
Strategy launched this new offering at a pivotal time in the market. Investors now seem particularly interested in a new type of financial product that would offer them exposure to Bitcoin and be supported by its potential growth. By entering the market of preferred stocks, Saylor’s company provides investors with bond-like income and redirects their capital directly into Bitcoin, without having to sell any of its BTC holdings. This approach has helped the company rapidly grow into the largest Bitcoin treasury company in the world and has made others follow its example and adopt a similar strategy.
Michael Saylor’s post reveals that STRC can now be obtained by a select pool of investors via an IPO. Thus, it follows the same mechanics of instruments issued by Strategy earlier, which have helped it raise billions in capital to accumulate Bitcoin. All of these preferred shares are perpetual (without a maturity date), and they pay quarterly dividends. They are backed by the company’s Bitcoin holdings.
Strategy buys more BTC, now holding 607,770 Bitcoin
Prior to the STRC announcement, Strategy spread the word about a major Bitcoin acquisition made at the start of this week. On Monday, Saylor announced that his Bitcoin treasury firm bought 6,220 Bitcoins for approximately $739.8 million at an average price of $118,940 per coin.
This has boosted the company’s Bitcoin holdings to a mind-blowing 607,770 BTC worth more than $71 billion at the current BTC/USD exchange rate. However, the company spent roughly $43.6 billion to accumulate that much BTC. By now, Strategy holds more than 2.9% of all Bitcoins that have ever been minted by miners. This is one of the largest known corporate Bitcoin position so far. Only BlackRock’s spot Bitcoin ETF holds more BTC than Strategy – 700,000 BTC.
Notably, Saylor also announced that Strategy’s Bitcoin yield year-to-date (YTD) stands at an impressive 20.8%. This figure was calculated from the price increase and the capital efficiency of the company’s funding methods. In recent weeks, the company managed to raise the aforementioned $736 million from its regular MSTR stock, plus obtaining additional capital through its STRK, STRF, and STRD at-the-market (ATM) offerings.
An important thing is that the company seems to be undeterred by Bitcoin’s high price as it continues to accumulate at peaks. Currently, the largest crypto is trading at $117,900, having lost 1.8% today. This price fall took place after Bitcoin regained 2.9% on Tuesday, recovering after a 2.31% decline on Monday. No matter how high the price goes, Strategy executes its plan on Bitcoin accumulation as if proving Saylor’s firm belief in Bitcoin’s bullish long-term prospects.
More companies follow Strategy’s playbook
The launch of STRC and similar securities before it by Strategy is more than just fundraising. It has now become a corporate model engineered by Saylor’s company, and it has been taken up by those following in its footsteps.
A new term has been coined for entities like that – a Bitcoin treasury company. Among them are Metaplanet, MARA Holdings, H100 Group, Matador Technologies, Sequans, and Semler Scientific.
MARA plans to raise nearly $1 billion to accumulate more Bitcoin. Sequans has bought 1,264 Bitcoin, and H100 Group has purchased 140.25 BTC. They are all using Strategy’s moves as a blueprint.
Such tools as STRC are absorbing capital from financial institutions that are after income but do not want to buy and hold Bitcoin directly. This Bitcoin-accumulation strategy has turned Saylor’s company into a financial powerhouse in the crypto world.
Overall, Strategy’s goal is to invest $72 billion into accumulating Bitcoin. In a recent tweet, Saylor confirmed that intention, saying that it is “the Rule of 72 orange dots.” Orange dots on Strategy’s charts show Bitcoin accumulation points.
