According to Cointelegraph, Strategy, recognized as the largest corporate holder of Bitcoin globally, has unveiled plans for a new stock offering aimed at raising additional funds for cryptocurrency investments. The company, led by Michael Saylor, announced its intention to initiate an initial public offering of 5 million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC). The proceeds from this offering are earmarked for general corporate purposes, including the acquisition of Bitcoin and bolstering working capital.
The STRC Stock is distinct from previous offerings, as it will accumulate cumulative dividends at a variable rate based on the stated amount of $100 per share. The initial monthly regular dividend is set at 9% annually. This announcement follows Strategy's recent $4.2 billion at-the-market (ATM) offering on July 7, which serves as an equity-raising mechanism allowing the firm to issue new shares to purchase more Bitcoin. The new stock offering will be available through an initial public offering (IPO) to select investors, as noted by Saylor in a recent post.
The STRC stock is designed to adjust its monthly regular dividend rate in a manner that Strategy believes will maintain its trading price close to the stated amount of $100 per share. This mechanism positions the STRC stock as a "new financial lifeform" optimized to convert fiat currency into Bitcoin rapidly, according to Bitcoin author Adam Livingston. Livingston suggests that Strategy can modify the rate each month to keep STRC trading near $100 par, akin to a synthetic stablecoin with yield. This approach allows investors to buy into a yield-targeted Bitcoin conduit, attracting fiat through yield and facilitating dollar-cost averaging into Bitcoin.
The announcement of the new stock offering coincides with Strategy's recent acquisition of $740 million worth of Bitcoin, purchased at an average price of $118,940 per coin. This move underscores the company's confidence in Bitcoin's price trajectory. Bitcoin-focused treasury companies like Strategy and Metaplanet are anticipated to drive Bitcoin towards becoming a $100 trillion market opportunity, as suggested by Adam Back, co-founder and CEO of Blockstream. Back envisions a sustainable and scalable trade front-running hyperbitcoinization, scalable enough for most major listed companies to transition to Bitcoin treasury holdings.