Strategy to raise $4.2b via STRD stock sale to fund new Bitcoin purchases

Bitcoin giant Strategy is preparing to make a massive $4.2 billion Bitcoin purchase, funded with more stock sales.

After taking a brief pause in purchases, Michael Saylor’s Strategy is preparing for another massive Bitcoin (BTC) buy. On Monday, July 7, the Bitcoin investment firm announced a $4.2 billion at-the-market stock offering.

The company is selling a 10.00% Series A Perpetual Stride Preferred Stock, trading on Nasdaq under the ticker STRD. The stock pays a 10% dividend, has priority over other stocks in liquidations, and has no fixed maturity rate.

Strategy will sell these shares over a period of time, at their market price. This is typically done to avoid a large supply shock that could tank the stock’s price. The proceeds of the sales will go toward buying Bitcoin, paying dividends on other preferred shares, and funding its operations.

$4.2B sale comes after Strategy’s Bitcoin hiatus

The latest purchase comes after a brief hiatus in the weekly reporting period from June 30 and July 9. This was the first week in which Strategy made no Bitcoin purchases since early April, briefly pausing its aggressive BTC accumulation.

The last time that Strategy raised capital was on June 10 this year in an underwritten public offering. At the time, the company raised $979.7 million from direct investments from investment banks. These banks bought shares upfront and then sold them to the public.

So far, Strategy has amassed $64.4 billion worth of Bitcoin, or 597,325 BTC. This accumulation brought $22 billion in unrealized profits, as this BTC was bought for a total of $42.4 billion. The total amount of Strategy’s BTC tokens now makes up nearly 3% of the total supply, making it by far the largest corporate holder.

Still, its leveraged Bitcoin purchases are causing some concerns over sustainability, especially if Bitcoin’s price falls substantially.