MicroStrategy has announced plans for an initial public offering of 5 million new shares, designated as STRC, on the Nasdaq exchange. The funds will be used for general corporate financing, including the purchase of Bitcoin.
Details of the STRC Share Offering
MicroStrategy plans to issue 5 million shares of STRC, which will be registered under the Securities Act of 1933. The shares are expected to trade on Nasdaq under the symbol STRC. Proceeds from the offering will reportedly be used for general corporate financing, including Bitcoin purchases and financing working capital.
STRC Share Dividend Conditions
Each STRC share will have a par value of $100 and will pay an initial dividend of 9% annually. Dividends will be paid in cash on the last day of each month, subject to approval by the company's board of directors. The first dividend payment will be made on August 31, 2025.
MicroStrategy's Strategy
The company retains the right to change the dividend rate in the future; however, such changes will be subject to certain limitations. The dividend rate may be reduced by a maximum of 25 basis points compared to the prior period, plus an additional percentage calculated based on specific market conditions. Furthermore, the new rate cannot fall below the one-month SOFR interest rate for certain dates. The company’s strategy is to adjust the dividend rate to keep the market price of STRC shares close to the par value of $100. Unpaid accumulated dividends will be subject to 'compound dividends', which will accrue interest monthly.
In conclusion, MicroStrategy's IPO initiative for STRC shares represents a strategic move to finance the purchase of Bitcoin and maintain the market value of newly issued shares, potentially impacting the investment climate surrounding the company.
