Strategy has successfully raised $715 million through the launch of its Perpetual Stream Preferred Stock (STRE), targeting investors in Europe for the first time. This offering, announced in a blog post by the Tysons Corner, Virginia-based company, comes as part of its ongoing effort to access foreign markets.
The STRE shares are designed to pay regular dividends and will be listed on the Euro MTF Luxembourg exchange, unlike Strategy’s previous preferred stocks, which became available to individual investors via retail brokerage Robinhood last month. While the offering was initially expected to price higher, it ultimately sold for €80 ($93) per share, compared to a par value of €100 ($116).
The proceeds from this offering are earmarked for various operational expenses, including the acquisition of more Bitcoin. Currently, Strategy holds 641,205 Bitcoin, valued at approximately $64.6 billion based on recent market prices. Despite this significant asset base, the company’s shares experienced a 3% drop on Friday, closing at $230, which marks a 14% decline over the past week amid fluctuations in Bitcoin prices.
Michael Saylor, co-founder and executive chairman of Strategy, highlighted the STRE as the company’s first digital credit instrument aimed at the European market. He noted that the fixed 10% dividend associated with STRE mirrors the structure of STRF, which was introduced in March. The dividends for STRE are to be paid in cash and accumulate based on its stipulated stated amount.
Investors in the preferred stock will have a higher priority claim to the company’s assets compared to common shareholders, although they take a backseat to STRF holders and those with Strategy’s debt. Historically, the company has relied on issuing common shares to expand its Bitcoin holdings, but as its stock price has diminished compared to the value of its Bitcoin reserves, the strategy has shifted towards preferred shares for financing.
As of Friday, Strategy maintained a market capitalization of $66 billion, reflecting a slight premium over its Bitcoin holdings. This marks a significant decline from the previous year, when shares traded at nearly three times the value of the Bitcoin held by the company.
In recent financial maneuvers, Strategy disclosed that it acquired $45.6 million worth of Bitcoin earlier this week after raising $69.5 million through various equity instruments. The company has recently been able to raise more capital than it has expended on Bitcoin due to impending dividend payments.
Meanwhile, as the premiums enjoyed by many Bitcoin treasury firms begin to narrow, other industry players like the French semiconductor firm Sequans have initiated the sale of Bitcoin to reduce debt, contrasting sharply with Saylor’s long-standing advice to hold rather than sell Bitcoin. Current predictions from the market suggest a 95% likelihood that Strategy won’t part with any Bitcoin before year-end, reflecting growing confidence in the company’s asset retention strategy.
