Michael Saylor’s Strategy Plans Stock IPO to Fund Bitcoin Buys, Operations

Strategy, formerly micro strategy, announced Plan on Monday to attract fresh capital by selling shares of preferred stock, where the proceeds are reserved for Bitcoin purchases and other operational costs.

Strategy operates as a “Bitcoin Treasury” company and is looking for $ 250 million via an initial public offer of 2.5 million shares of its “10% series A Petual Stride Preferred Stock” (STD).

The share is stated on the Nasdaq, where each share initially costs $ 100 and investors offers an annual dividend yield of 10%, according to a recent application.

“We are planning to use the net revenue of this offer for general business purposes, including the acquisition of Bitcoin and for working capital,” Strategy wrote in its Monday for the time being prospectusA supplement to an earlier submission of January 27.

The STD offer represents the third preferred issue of the strategy this year after its strike (STRK) and Strife (Strf) Offers.

In March, the company increased the size of these offers from $ 500 million to $ 723 million Within a few days after their announcement. The new shares of STRD have an annual, non-cumulative cash dividend of 10%, at the beginning of September 30.

Preferred Stock, such as Strategy’s strd, Strf and STRK offers, refers to a hybrid “interest in a company, sold at trade fairs such as ordinary shares,” Asset Management Firm Fidelity explains.

It combines bond-like functions with stock ownership, which gives holders priority above ordinary shareholders for dividend payments and assets claims, but usually without voting rights.

However, these dividends are not guaranteed or cumulative, so if they are not proclaimed in a certain quarter, investors will not be paid later or they will earn back missed payments.

Strategy has collected so far $ 61 billion in BitcoinCurrently appreciated at around $ 106,000 each, according to facts Van Coingecko.

Strategy sees its Bitcoin stock as “long-term companies” with the expectation to collect more.

There is no “specific target for the amount of bitcoin that we try to retain,” wrote strategy in its prospectus application, adding that it would continue to “monitor market conditions” to know if it should add more bitcoin or do more financing.

Nevertheless, the strategy warns that a strong decrease in Bitcoin’s market value to meet financial obligations could damage the potential for a “significant decrease” in his participations to have adverse effects.

The company also notes that even non -realized profits on its Bitcoin can lead to it “being subject to the alternative minimum tax”, liability under the Inflation reduction Act from 2022.

Edited by Sebastian Sinclair