Breaking: Strategy Announces $500 Million STRC IPO To Buy More Bitcoin

Michael Saylor’s Strategy is exploring new vehicles to fund its Bitcoin purchase, with the latest play being an initial public offering (IPO). A press release reveals that a Strategy STRC IPO is looming in the distance, but market conditions will decide its eventual rollout.

Strategy STRC IPO To Offer 5 Million Shares

According to a press release, Strategy (formerly Microstrategy) has announced an imminent IPO to raise funds to buy more Bitcoin. The company is offering 5 million shares of Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) to investors.

At $100 per share, Strategy is eyeing a $500 million capital raise from the STRC IPO. The company says it will use the funds to power its Bitcoin purchases and earmark a portion for working capital.

“Strategy intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin and for working capital,” read the statement.

The announcement to launch a STRC IPO follows Strategy’s $739 million Bitcoin purchase last week, which increased its holdings to 607,770 BTC. Per the statement, the Strategy STRC IPO will depend on market conditions for launch, with the company extending its range of preferred stock offerings.

New Preferred Stock To Offer Indirect Bitcoin Exposure

Dubbed Stretch, the new Perpetual Preferred Stock will pay monthly dividends at a variable rate. However, the initial monthly dividend rate each year is pegged at 9.00% with Strategy having the right to adjust the monthly regular dividend rate. This is the latest lineup among the company’s securities, following its recent announcement of a $4.2 billion STRD offering.

Despite its absolute discretion, there are certain restrictions to Strategy’s right to reduce the monthly dividend. Strategy is limited to cutting the monthly dividend rate by more than 25 basis points plus any rise in interest rate volatility measured by secured overnight financing rate.

Furthermore, Strategy has the right to redeem shares of outstanding STRC stock at any time after listing on a global stock exchange.  The redemption price is $101 per share in addition to any unpaid dividends till the redemption date. Meanwhile, the liquidation preference of the STRC stock will begin at $100 per share.

The Strategy STRC IPO is being led by Morgan Stanley, TD Securities, and Barclays as joint book-running managers. Amid the announcement, MSTR stock is up nearly 1% to trade at $426.28. Strategy is sitting on an unrealized  Bitcoin gain of around $30 billion as it leads the pack for corporate adoption of the largest cryptocurrency.