Strategy (NASDAQ:MSTR) just pulled off a bold move, raising over $711 million through an offering of high-yield preferred stockand yes, they’re using the cash to buy more Bitcoin. The company priced 8.5 million shares of its 10.00% Series A Perpetual Strife Preferred Stock at $85 a pop, with the deal expected to close on March 25. The structure? Aggressive. Investors will get a fixed 10% dividend, but if payments are missed, it compoundsand fasteventually topping out at 18% annually. It’s the kind of high-stakes financing Strategy is known for, blending big returns with even bigger conviction.
The capital injection gives Strategy fresh fuel to expand its already massive Bitcoin holdings, which currently sit just shy of half a million tokens. With a current ratio under 1.0 and a strategy tied closely to crypto, the offering tackles two birds: liquidity and leverage. Notably, Strategy recently funneled $10.7 million from a smaller preferred stock sale into buying another 130 bitcoins. All of this comes as the stock has soared more than 100% over the last six months, even as valuation models flash warning signs. Strategy’s dual engineenterprise analytics and a Bitcoin-first treasurycontinues to defy conventional playbooks.
This offering was backed by a who’s who of Wall Street: Morgan Stanley, Barclays, Citi, and Moelis, among others. Strategy also has plans to issue up to $21 billion more of this preferred stock over time, reinforcing that it’s not just flirting with Bitcoinit’s all in. Redemption clauses kick in if the outstanding shares drop below 25% or if tax events arise, but for now, investors are leaning into the risk. The takeaway? Strategy isn’t playing defense. It’s doubling down on Bitcoin, and it wants investors to go along for the ridewith dividends in hand.
This article first appeared on GuruFocus.
