Strategy, the world’s largest corporate holder of cryptocurrency, has announced a new stock offering aimed at increasing its investment in Bitcoin. Under the leadership of Michael Saylor, the company plans to launch an initial public offering (IPO) of five million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC). The proceeds from this offering will be allocated towards general corporate purposes, including the acquisition of additional Bitcoin and the enhancement of working capital.
A distinctive feature of the STRC stock is its cumulative dividends, which accrue at a variable rate based on a fixed amount of $100 per share. The initial monthly dividend rate has been set at an annualized 9 percent. This announcement follows Strategy’s recent market-based offering valued at $4.2 billion, which was designed to provide the company with further capital to purchase Bitcoin through the issuance of new shares. According to Saylor, the new stock offering will be made available on a limited basis exclusively to select investors.
The STRC shares incorporate a novel financial structure that adjusts the monthly dividend rate to help maintain the stock price near the $100 mark. Bitcoin expert Adam Levingstone has characterized the stock as a “new financial instrument” capable of rapidly converting fiat currency into Bitcoin. Effectively, this stock acts as a synthetic stablecoin, enabling investors to gain exposure to Bitcoin through dividend income.
This initiative coincides with Strategy’s recent purchase of $740 million worth of Bitcoin, acquired at an average price of approximately $118,940 per coin, reflecting the company’s strong confidence in Bitcoin’s valuation. Looking ahead, Adam Back, co-founder of Blockstream, projects that companies like Strategy and Metaplanet will propel Bitcoin toward a $100 trillion market opportunity, wherein a majority of large corporations will adopt Bitcoin as part of their treasury reserves.
Source: binance
