Strategy, one of the largest corporate holders of Bitcoin, has announced a new stock offering aimed at raising additional funds for Bitcoin investments.
Overview of the New Stock Offering
Strategy has announced plans for an initial public offering (IPO) of 5 million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC). The net proceeds will be used for “general corporate purposes, including the acquisition of Bitcoin and for working capital.”
Trading Mechanics and STRC Dividends
STRC stock will accumulate cumulative dividends at a variable rate on a stated amount of $100 per share. The initial monthly dividend will be 9% annually. The offering aims to “adjust the monthly regular dividend rate per annum in such manner as Strategy believes is designed to cause the STRC Stock to trade at prices at or close to its stated amount of $100 per share.”
Bitcoin Purchases and Market Potential
The announcement comes shortly after Strategy bought $740 million worth of Bitcoin at an average price of $118,940 per coin. According to Adam Back, co-founder of Blockstream, companies like Strategy may help Bitcoin evolve into a $100 trillion market opportunity, creating a “sustainable and scalable” model for large corporations.
The announcement of Strategy's new stock offering underscores the growing interest in cryptocurrencies among traditional financial institutions and suggests an evolution of financial instruments related to Bitcoin.
