Strategy, formerly known as MicroStrategy, has announced plans to raise $21 billion through its class A strike preferred stock (STRK) as part of its ongoing Bitcoin acquisition strategy. Despite recent market downturns and macroeconomic uncertainties, the firm remains committed to expanding its Bitcoin holdings.
Expanding Capital for Bitcoin Investments
According to a filing with the U.S. Securities and Exchange Commission (SEC), Strategy intends to use the proceeds from STRK sales to fund general corporate operations, which could include additional Bitcoin purchases. This move aligns with the firm’s ambitious “21/21” roadmap, a plan spearheaded by Executive Chairman Michael Saylor to raise and invest $42 billion in BTC.
Currently, Strategy holds approximately 499,096 BTC, valued at over $41 billion. The company has spent about $33.1 billion accumulating its Bitcoin reserves at an average purchase price of $66,357 per BTC, largely funded through equity sales.
The Role of STRK in Strategy’s Bitcoin Plan
The introduction of STRK, a perpetual preferred stock, adds flexibility to Strategy’s capital-raising efforts. Unlike bonds, which have a maturity date, STRK offers a predetermined dividend of 8% indefinitely, as long as the company remains operational. Investors also have the option to convert their STRK holdings into class A common shares, subject to specific conditions.
Additionally, Strategy has implemented a buyback provision for STRK, allowing the company to repurchase unbought shares if their value drops 25% below the initial issuance price. This safeguard provides financial stability while continuing its aggressive Bitcoin investment approach.
Market Response and Outlook
According to TradingView data, STRK was down 2.1% at last week’s close. Furthermore, Strategy did not record new investments in its class A common stock between March 3 and March 7, suggesting that the company may not announce a new Bitcoin acquisition in the immediate term.
Despite short-term fluctuations, Strategy’s commitment to accumulating Bitcoin underscores its confidence in BTC as a long-term asset. With its “21/21” initiative in motion, the company continues to solidify its position as one of the largest corporate Bitcoin holders globally.
