Strategy raises €620M after strong demand for STRE preferred stock issuance

Strategy announced the pricing of its STRE Euro-denominated preferred stock. Robust demand for the new product raised the round from 350M EUR to 620M EUR. 

Strategy will price the 10% Series A Perpetual Stream Preferred Stock (STRE) at 80 EUR per share, and will place 7,750,000 shares with 10% annual cumulative dividends. 

The issue of the STRE stock will settle on November 13, following the usual closing procedures. STRE proceeds will serve for general corporate purposes, with some of the funds allocated to BTC acquisitions. 

Strategy expects gross proceeds of $751M, the equivalent of 620M EUR after fees, commissions, and other expenses. The pricing will settle at $1.15 per euro. 

STRE offer closed to Euro area retail investors

Despite the euro denomination, STRE will only be available for qualified investors in the Euro area, and the offer will not target retail buyers. There will be no prospectus for Euro area buyers, nor for UK-based buyers, only making STRE available to professional investors. 

STRE holders will be eligible to receive 10% annualized dividends on the 100 EUR face value of STRE. If a dividend is not paid out, it would accumulate, up to a total annualized rate of 18%. Dividends will be paid in cash only. STRE dividends may also be deferred, and the payment may be completed after additional placements of STRK, MSTR, or other junior stocks. 

As Cryptopolitan reported, STRE will also include a buyback feature at any moment, at the discretion of the company’s board. In the case of a ‘fundamental change’ for market conditions, holders of STRE may also require a cash repurchase, including accumulated unpaid dividends. 

MSTR trades near yearly lows

The latest STRE sale may slow down the MSTR dilution for a short period. The raise is enough for multiple purchases of BTC, if Strategy follows its approach of smaller weekly additions to the treasury. 

The current market conditions affected Strategy’s MSTR common stock. MSTR traded at a 52-week low of $237.20. The shares weakened further as BTC sank back to the $100,000 range. 

MSTR shares fell to a one-year low as BTC prices weakened. | Source: Google Finance

For now, Strategy still trades at a mNAV value of 1.27. However, this value no longer reflects enthusiasm for MSTR shares. If the stock falls further, Strategy’s treasury may become more valuable relative to outstanding shares. 

MSTR can hypothetically reverse in the case of a bull market. However, Strategy’s playbook often relies on buying near the top, during times of strong momentum. The company is yet to be tested by a bear market, coming down from recent highs. 

Before the recent MSTR slide, BTC took another downturn, briefly plunging to $99,980.

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