Plan to Gather Around Half a Billion Dollars through Shares Sale for Buying Bitcoins
MicroStrategy, formerly known as Strategy, has revealed plans to sell 5 million Class A preferred shares at a price of $100 per unit, aiming to raise funds for general corporate purposes. The company intends to utilize these funds in part for Bitcoin acquisition.
In a statement released today, Strategy has introduced a new perpetual preferred stock offering, dubbed Strife, available to select institutional and non-institutional investors. The preferred stock, named $STRF, offers a consistent 10% annual dividend, paid quarterly in cash. Notably, the company reserves the right to repurchase part or all of the issued shares if necessary.
This announcement comes after MicroStrategy purchased 130 BTC for $10.7 million, marking the company's smallest acquisition of digital gold since it first adopted a Bitcoin strategy in August 2020. With the latest transaction, Strategy's Bitcoin holdings now amount to 499,226 BTC.
Prominent figures within the financial industry have weighed in on the maneuver. Euro Pacific Capital President Peter Schiff criticized the move, considering it an desperate attempt to prevent the Bitcoin market from deflating, depending solely on support from the Trump administration to remain afloat. Meanwhile, internet entrepreneur Jason Calacanis accused MicroStrategy's founder, Michael Saylor, of "hijacking" Bitcoin by acquiring vast quantities of the cryptocurrency.
In response, Anthony Pompliano, founder and CEO of Professional Capital Management, defended the company, stating that as a publicly traded organization, Strategy's Bitcoin holdings are owned by numerous investors. Simon Dixon, founder of BnkToTheFuture, cautioned that the risk involved in promising fixed 10% dividends without guaranteed revenue may pose a potential challenge to Strategy. Despite this, he speculated that in the event of financial difficulty, the government might seize control of the company and work towards establishing a national Bitcoin reserve.
MicroStrategy aims to raise a total of $21 billion through subsequent Class A preferred stock offerings.
Investors interested in technology and finance might find the new perpetual preferred stock offering, Strife, appealing, as MicroStrategy, previously known as Strategy, plans to use the funds raised for Bitcoin acquisition and general corporate purposes, following their recent strategy shift towards Bitcoin. Notably, this move has drawn criticism from some financial experts, with Jason Calacanis accusing the company's founder, Michael Saylor, of "hijacking" Bitcoin through mass cryptocurrency acquisition.
