Strategy Files For $21B In Preferred Stock To Fund Bitcoin Acquisition

by Murtuza Merchant Benzinga Staff Writer

Zinger Key Points

Proceeds will mainly fund Bitcoin purchases, with some supporting Strategy’s working capital and corporate needs.
The perpetual strike preferred stock, convertible to common stock, will be sold via an ATM program.
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Strategy Inc. MSTR, announced on Monday that it has filed to offer up to $21 billion in preferred stock to raise funds for Bitcoin BTC/USD purchases.

What Happened: The sales agreement involves issuing 8.00% Series A perpetual strike preferred stock STRK with a par value of $0.001 per share, which holders can convert into Strategy's class A common stock.

The proceeds will primarily support Bitcoin acquisitions, with additional funds allocated for working capital and general corporate purposes.

The offering, structured as an at-the-market (ATM) program, allows Strategy to sell shares over time based on market conditions, such as trading prices and volumes.

The company filed a prospectus supplement with the Securities and Exchange Commission on March 10, utilizing an existing shelf registration effective since Jan. 27 this year.

Sales may occur through ATM offerings under SEC Rule 415(a)(4), negotiated transactions, or block trades, adhering to legal requirements.

Also Read: Crypto Exchange Kraken Sets Sights On 2025 Initial Public Offering

Why It Matters: Strategy, formerly MicroStrategy Incorporated, has positioned itself as a leader in holding Bitcoin as a treasury asset, a strategy it says offers investors exposure to the cryptocurrency.

Critics, however, question the risks of tying corporate finances so heavily to a volatile asset like Bitcoin.

The company also operates an AI-powered analytics business, aiming to balance its digital asset focus with enterprise software revenue.

Strategy holds 499,096 BTC, valued at over $41 billion, according to its latest 8-K filing.

However, the company did not sell any class A common stock through its at-the-market equity offering program to acquire more bitcoin in the past week.

The firm’s total bitcoin holdings were purchased at an average price of $66,357 per BTC, amounting to approximately $33.1 billion, including associated fees and expenses.

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