Imagine sitting across from me, coffee steaming, as we talk about the latest moves in the crypto world. Today, the spotlight falls on Strategy, the company once known as MicroStrategy. They just made a rather bold announcement. It seems their appetite for Bitcoin remains as strong as ever, perhaps even stronger.
- Strategy, formerly MicroStrategy, is raising $1 billion to buy more Bitcoin, showing a strong commitment to the cryptocurrency.
- The company has already accumulated a significant amount of Bitcoin, holding over 580,000 BTC, making them the largest corporate holder.
- Other companies, like Metaplanet, are also raising capital to invest in Bitcoin, indicating a broader trend of corporate adoption.
On Friday, Strategy revealed it had priced its STRD offering. This isn’t just any offering. It’s for their 10% Series A Perpetual Stride Preferred Stock. What started as a $250 million plan quickly grew. It ballooned to a full $1 billion.
This means Strategy plans to sell 11,764,700 shares. Each share carries a price tag of $85.00. The company expects to net around $979.7 million from this sale. That’s after accounting for all the usual fees and expenses. The deal should close on June 10, assuming everything goes smoothly.
So, what’s the big idea behind raising all this capital? Strategy states the funds are for general corporate purposes. This includes, of course, buying more Bitcoin. It also covers working capital needs.
This isn’t Strategy’s first rodeo with preferred shares. They have other offerings too. There’s Strike, or STRK, which is a convertible preferred stock. It pays an 8% annual dividend. Then there’s Strife, or STRF, a non-convertible option with a 10% fixed annual dividend. The new STRD stock is also non-convertible. It offers a 10% non-cumulative annual dividend. This means the dividends aren’t mandatory, a detail worth noting.
These are perpetual preferred shares. Think of them like a bond that never matures. They don’t have a set end date. Instead, they promise fixed dividend payments. These payments continue as long as the company operates. It’s a way to raise capital without taking on traditional debt or diluting common stock too much.
To pull off such a large offering, Strategy enlisted some big names in finance. Morgan Stanley, Barclays, and TD Securities acted as joint book-running managers. This shows the scale and seriousness of the operation.
The Bitcoin Accumulation Game
Now, let’s talk about the Bitcoin itself. Strategy has been a consistent buyer for years. But the pace of their purchases has recently shifted. On Monday, they announced a smaller acquisition. They bought 705 BTC for about $75.1 million. This happened between May 26 and June 1. The average price paid was $106,495 per Bitcoin. These funds came from sales of their STRK and STRF shares.
This latest buy brings Strategy’s total Bitcoin holdings to an impressive 580,955 BTC. That’s a staggering amount. It’s worth over $60 billion at current prices. The company’s co-founder, Michael Saylor, confirmed these figures. He noted the average purchase price for their entire stash is $70,023 per Bitcoin. The total cost, including fees, stands at around $40.7 billion. This means they are sitting on roughly $19.3 billion in paper gains. That’s quite a return.
To put their holdings in perspective, Strategy now controls about 2.8% of Bitcoin’s total 21 million supply. That’s a significant chunk. It makes them the largest corporate holder by a wide margin.
But the pace of their buying has indeed slowed. Analysts at K33 pointed this out last week. They suggested a few reasons. One is a sharp decline in MSTR’s premium to its Bitcoin holdings. This might push the firm to raise capital more moderately. Another factor is the growing competition. More companies are now looking to add Bitcoin to their treasuries.
Just to illustrate the slowdown, consider their previous purchase. Between May 19 and May 25, Strategy acquired 4,020 BTC. That cost them about $427.1 million. The average price was $106,237 per Bitcoin. Comparing 4,020 BTC to 705 BTC in similar timeframes shows a clear deceleration.
Despite the slower buying pace, Strategy’s MSTR shares saw a positive reaction. They were up 1.5% in pre-market trading on June 6. Investors seem to like the capital raise, even if it’s for more Bitcoin.
The Broader Landscape
Strategy isn’t alone in this corporate Bitcoin accumulation trend. Earlier on Friday, another company, Metaplanet, made headlines. They announced their own plan to raise $5.4 billion in equity. Their goal? You guessed it: to buy more Bitcoin.
This signals a broader movement. Companies are increasingly seeing Bitcoin as a treasury asset. It’s a way to store value. It’s also a way to potentially grow their balance sheets. This trend adds a new layer to the Bitcoin market. It introduces institutional demand that wasn’t there just a few years ago.
The question now becomes: how much more capital can companies like Strategy raise for Bitcoin? And how will this ongoing demand affect Bitcoin’s price? These are the kinds of questions that keep us all watching the market with keen interest. The game of corporate Bitcoin accumulation is certainly heating up, even if one player’s pace has cooled a bit.