Overview

The world’s largest corporate holder of bitcoin is seeking to raise approximately $500 million by issuing 5 million shares of Series A perpetual preferred stock known as Strife (STRF). This new stock will feature a fixed 10% annual cash dividend, which is an increase from the 8% offered initially on their previous preferred stock issuance.

Key Details

• The cash dividend will be paid quarterly. If a dividend goes unpaid, it will compound at an additional 1% per year.
• First payment is scheduled for June 30, 2025.

Unlike common stock, STRF shareholders won’t have voting rights, but they will have priority in liquidation with a $100 per share liquidation preference. MicroStrategy retains the right to redeem STRF shares under certain conditions, while shareholders can request a buyback in the event of significant company changes.

Market Context

The issuance of the STRF is expected to trade on Nasdaq within 30 days and will provide investors a high-yield structure with exposure to bitcoin. Major financial institutions such as Morgan Stanley, Barclays, Citigroup, and Moelis & Company are managing the offering under an SEC shelf registration.

After a period of aggressive bitcoin purchases, MicroStrategy’s pace of fundraising has notably slowed, with the latest acquisition including only 130 BTC for $10.7 million which brought their total to approximately 499,226 BTC. The recent dip in bitcoin prices is reflected in the company’s shares, which saw a 5% decline in early trading.