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Strategy (formerly known arsenic MicroStrategy) has announced plans to rise further superior done a Strife Preferred Stock (STRF) offering.
In a March 18 announcement, the steadfast intends to contented 5 cardinal shares of its Series A Perpetual STRF stock, taxable to regulatory support and marketplace conditions. The superior raised volition beryllium directed toward firm operations, including Bitcoin acquisitions and wide expenses.
This caller offering follows Strategy’s plans to rise $21 cardinal from its Strike (STRK) preferred stock.
Strategy is the largest nationalist holder of Bitcoin. On March 17, the steadfast expanded its Bitcoin reserves to 499,226 BTC, pushing the estimated worth of its holdings past $41 billion.
STRF
According to the statement, each STRF stock carries a $100 liquidation penchant and offers a fixed yearly dividend complaint of 10%.
The institution has outlined that dividends tin beryllium distributed successful cash, Class A communal stock, oregon a premix of both. Pending support from Strategy’s board, shareholders volition person quarterly dividend payments opening June 30, 2025.
Strategy said it would wage further compounded dividends if payments were not made arsenic scheduled. The compounded dividend complaint starts astatine 10% and increases by 100 ground points annually.
If outstanding dividends stay unpaid, this complaint volition proceed expanding annually by 100 ground points until it reaches a headdress of 18% per annum.
Strategy besides retains the close to redeem STRF shares nether circumstantial conditions, peculiarly if the outstanding shares driblet beneath 25% of the full issuance. Regulatory oregon tax-related events whitethorn besides trigger redemption.
Financial risks
Strategy’s caller offering has sparked important concerns among crypto assemblage members astir the Bitcoin-focused firm’s fiscal health.
Simon Dixon warned that Strategy’s committedness to a 10% perpetual dividend presents important fiscal risks contempt lacking capable dollar gross and relying connected a Bitcoin-based equilibrium sheet.
Dixon compared the concern to Long-Term Capital Management, a hedge money that collapsed and required a bailout. He speculated that if Strategy faces fiscal distress, nationalization mightiness go an enactment for the US government.
Pseudonymous Bitcoin expert WhalePanda echoed akin concerns, suggesting that Strategy’s offering appears desperate. He highlighted the fiscal strain of a 10% dividend connected a $500 cardinal raise, translating to $50 cardinal successful yearly payouts—cash the institution whitethorn not have.
BitMEX Research besides flagged a clause successful STRF’s prospectus stating that the committee oregon a committee could take not to wage accumulated dividends for immoderate reason.
Considering this, analysts astatine BitMEX speculated that Class A MSTR shareholders whitethorn ne'er person a dividend payment.
The station Strategy raises eyebrows with 10% dividend STRF offering amid debased dollar revenue appeared archetypal connected CryptoSlate.
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