There’s a company out there, Strategy, that seems to have a singular focus. They buy Bitcoin. A lot of it. And when I say a lot, I mean enough to make most corporate treasuries look like piggy banks. Their latest move? They are offering a fresh batch of shares, called ‘Stride’, to keep that Bitcoin buying spree humming along.
- Strategy, a company focused on Bitcoin, is offering ‘Stride’ shares to fund more Bitcoin purchases. This is part of their strategy to become the biggest corporate holder of Bitcoin.
- The ‘Stride’ shares are perpetual preferred shares, offering a 10% dividend but no voting rights. This is different from previous offerings like ‘Strike’ which were convertible.
- Strategy’s success has led to a rise in its stock price, inspiring other companies to consider holding digital assets. They are betting on Bitcoin’s long-term value.
This isn’t just a quiet fundraising round. It is another bold step in what has become Strategy’s signature play. They are the biggest corporate holder of Bitcoin, after all. On Monday, they announced plans to sell 2.5 million shares of something called ‘Stride’ (STRD) perpetual preferred shares.
Think of it this way: Strategy needs capital to keep adding to its digital gold pile. They are not shy about how they get it. “Strategy intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin and for working capital,” the company stated. It is a direct line from new shares to more Bitcoin.
These new ‘Stride’ shares are a specific kind of offering. They are 10% Series A Perpetual Stride Preferred Stock. The company is making them available to institutional investors and a select group of non-institutional ones. It is not an open call to everyone, but a targeted approach for serious players.
Now, if you follow Strategy, you might remember their previous ventures into preferred shares. They have offered ‘Strike’ (STRK) and ‘Strife’ (STRF) before. It seems they have a fondness for names that start with ‘Str’. ‘Strike’ was a convertible preferred stock, offering a 13% yield. ‘Strife’ also offered a 10% yield.
Here is where it gets interesting with ‘Stride’ and ‘Strife’. The company says both ‘Stride’ and ‘Strife’ offer a 10% dividend. And here is the key difference from ‘Strike’: these shares cannot be converted into common Strategy shares. So, holders get a fixed payment, but no direct ownership stake in the company’s common stock.
Michael Saylor, the co-founder and Executive Chairman of Strategy, has even weighed in on these unique offerings. He called ‘Strife’ and ‘Strike’ “the first AI-designed securities.” It is a curious claim, isn’t it? One wonders what an AI might dream up next for the world of corporate finance.
Let us talk about what “perpetual preferred shares” actually mean. It sounds a bit grand, doesn’t it? Unlike a bond, which has a set maturity date when the company pays you back, perpetual preferred shares just keep going. There is no required redemption schedule. Instead, they promise fixed dividend payments for as long as the issuing company is in business. It is a bit like a never-ending coupon payment, if you will.
Strategy’s Bitcoin Playbook
Strategy has built its entire reputation on its Bitcoin strategy. They have been buying Bitcoin steadily for years. Their latest purchase pushed their total holdings to a staggering 580,955 BTC. At current prices, that is worth over $60 billion. It is a truly massive digital treasury.
This aggressive accumulation has not gone unnoticed. Strategy’s stock price has more than doubled in the past year. It is a testament to the market’s reaction to their Bitcoin-first approach. Many companies are now looking at Strategy and asking themselves if they should become a “cryptocurrency treasury company” too. It is a bold new corporate model, and Strategy is writing the rules as they go.
Their success has certainly inspired others. We are seeing more and more traditional businesses dip their toes into holding digital assets on their balance sheets. But few, if any, have gone all-in quite like Strategy. They are not just holding Bitcoin. They are actively funding its acquisition through various capital raises, like this new ‘Stride’ offering.
It is a fascinating experiment in corporate finance. Strategy is essentially betting its future on Bitcoin’s long-term value. And so far, that bet has paid off handsomely for their shareholders. It makes you think about how traditional corporate finance might evolve in the years ahead, doesn’t it?
The Fine Print on ‘Stride’
While ‘Stride’ preferred shares offer a steady 10% dividend, there are conditions under which Strategy can call them back. The company laid out these circumstances clearly in its statement. It is important for investors to understand these details.
One scenario allows Strategy to redeem all, but not less than all, of the ‘Stride’ stock. This can happen at any time, for cash. The condition is that the total number of ‘Stride’ shares still outstanding must be less than 25% of the total number originally issued. This includes the current offering and any future ones.
So, if a significant portion of the ‘Stride’ shares are no longer in circulation, Strategy has the option to buy back the rest. It is a way for them to clean up their balance sheet if the outstanding amount becomes too small. It gives them flexibility, which is always a good thing for a company.
There is also a second condition for redemption. Strategy can redeem all, but not less than all, of the ‘Stride’ stock if certain tax events occur. This is a standard clause in many financial instruments. It protects the company from unforeseen tax liabilities that might arise from these perpetual preferred shares.
These redemption clauses mean that while the shares are “perpetual” in nature, Strategy does retain some control over their lifespan. It is a balance between offering a steady income stream to investors and maintaining corporate agility. For investors, it means understanding that their fixed dividend stream could, under specific circumstances, come to an end.
Strategy continues its march, adding Bitcoin to its coffers with each new capital raise. This ‘Stride’ offering is just the latest chapter in their ongoing story. It shows a company deeply committed to its Bitcoin treasury playbook, willing to innovate in finance to achieve its digital asset goals. The market watches, and perhaps, learns.