A familiar tune is playing again in the crypto world, but with a fresh twist. Strategy, the software firm that has become synonymous with corporate bitcoin accumulation, just announced another significant move. They plan to sell up to $4.2 billion worth of a new type of preferred stock. This isn’t just any stock, it’s their 10.00% Series A Perpetual Stride Preferred Stock, known by its ticker, STRD.
- Strategy plans to sell $4.2 billion worth of a new preferred stock, STRD, to raise capital. This capital will be used for general corporate purposes, including acquiring more bitcoin.
- The company paused its bitcoin buying spree for the first time in three months, but its overall holdings remain substantial. Strategy holds over $65 billion worth of bitcoin.
- Strategy’s “42/42” plan aims to raise $84 billion by 2027 through equity offerings and convertible notes, specifically for bitcoin acquisitions.
Think of it like this: Strategy is opening a new credit line, but instead of borrowing from a bank, they are inviting investors to buy a special kind of share. These shares come with a fixed dividend, a 10% annual payout. The company intends to sell these shares through an “at-the-market” program. This means they will sell them gradually, watching the market price and trading volume, rather than in one big block. It’s a measured approach, designed to raise capital without flooding the market all at once.
So, what’s the money for? The official line is “general corporate purposes.” But for Strategy, that phrase often has a very specific meaning. It includes, yes, the acquisition of more bitcoin. It also covers working capital, which is just the everyday cash a company needs to operate. And, interestingly, some of the proceeds might go towards paying dividends on their other preferred stocks, like the 10% Series A Perpetual Strife Preferred Stock and the 8% Series A Perpetual Strike Preferred Stock. It’s a complex financial dance, isn’t it?
A Brief Pause in the Bitcoin Hunt
This news comes right after Strategy hit the brakes on its bitcoin buying spree. For the first time in three months, the company didn’t acquire any additional bitcoin. This quiet period stretched from June 30 to July 6. It was a noticeable pause for a company that has made bitcoin accumulation its defining mission.
I remember watching the news come out. It felt like a brief moment of calm in what has been a relentless pursuit. Before this recent pause, the last time Strategy held off on buying bitcoin was between March 31 and April 6. That period coincided with the release of their first-quarter results. Back then, they disclosed a hefty $5.91 billion in unrealized losses on their bitcoin treasury. A tough pill to swallow, even for a firm with such a long-term view.
Despite these past dips, Strategy’s bitcoin stash remains truly impressive. Michael Saylor, the company’s co-founder and executive chairman, recently shared the numbers. Strategy holds a grand total of 597,325 bitcoin. At current valuations, that’s worth over $65 billion. They acquired all this at an average price of $70,982 per bitcoin, for a total cost of around $42.4 billion, including fees and expenses. That’s a lot of digital gold, isn’t it?
To put that into perspective, Strategy’s holdings represent more than 2.8% of bitcoin’s total supply of 21 million coins. It’s a significant chunk. And if you do the math, those holdings imply around $22.6 billion in paper gains. That’s a nice turnaround from the Q1 losses. The company’s second-quarter results, released recently, showed an unrealized gain on digital assets of $14.05 billion. Of course, such gains also come with a price: a deferred tax expense of $4.04 billion.
How has Strategy funded this massive accumulation so far? They’ve been quite active in the capital markets. In recent weeks, they’ve used proceeds from at-the-market sales of their Class A common stock, known as MSTR. They also tapped into sales of their perpetual Strike preferred stock (STRK) and perpetual Strife preferred stock (STRF). An initial offering of the new STRD preferred stock also contributed. During the quarter that ended June 30, Strategy pulled in an aggregate net of $6.8 billion from these sales. It shows a consistent strategy of raising capital to buy bitcoin.
The Long Game: Strategy’s Capital Plan
This new $4.2 billion STRD program isn’t just a one-off. It fits into Strategy’s much larger capital plan. The company has what they call their “42/42” plan. This ambitious target aims to raise a total of $84 billion through equity offerings and convertible notes by 2027. Yes, you read that right, $84 billion. It’s a staggering sum, and it’s specifically earmarked for bitcoin acquisitions.
This “42/42” plan is actually an upsizing of an earlier, equally ambitious plan. Originally, they aimed for $42 billion, which they called the “21/21” plan. It seems Strategy is doubling down on its commitment to bitcoin. The equity side of that initial ATM program was recently depleted, which explains why they are launching this new STRD offering. It’s a continuous cycle of raising capital and buying more bitcoin.
What does this mean for the market? When a company makes such a large, public commitment to a single asset, it sends ripples. Strategy’s stock, MSTR, often acts as a proxy for bitcoin itself, sometimes with even more volatility. On the day this news broke, MSTR was down 1.3% in pre-market trading. It’s a reminder that even for a firm so dedicated to its bitcoin vision, the market always has its own reactions.
Strategy’s approach is certainly unique in the corporate world. They’ve essentially turned their balance sheet into a bitcoin treasury, funded by a continuous stream of capital raises. It’s a bold move, and it keeps many of us watching. Will this latest capital injection lead to another sustained period of bitcoin accumulation? Only time, and Strategy’s next financial filings, will tell.
