Strategy Plans $21B STRK Stock Sale for Bitcoin Expansion

Strategy, the company formerly known as MicroStrategy, is launching an ambitious fundraising initiative to generate up to $21 billion through the sale of its 8% Series A perpetual strike preferred stock (STRK). According to a recent prospectus filing with the Securities and Exchange Commission (SEC), the company aims to execute these sales via multiple channels, including at-the-market offerings, negotiated transactions, and block trades.

The proceeds from STRK’s sale will support general corporate purposes, with a strong emphasis on expanding the firm’s Bitcoin holdings and maintaining operational liquidity. Strategy disclosed these plans in a statement released on Monday.

STRK stockholders will receive cumulative dividends at an annual fixed rate of 8%, with a liquidation preference set at $100 per share. The company’s board of directors will determine whether to declare and distribute quarterly dividends.

This capital raise supplements Strategy’s broader "21/21 plan," which targets a total of $42 billion in equity and fixed-income securities to fuel Bitcoin acquisitions. The initiative aligns with the company's longstanding strategy of increasing its exposure to the leading cryptocurrency.

Currently, Strategy holds 499,096 BTC, valued at over $41 billion. However, the firm did not sell any shares of its class A common stock through its at-the-market equity offering program to purchase additional Bitcoin in the past week, as per its latest 8-K filing. The company’s total Bitcoin investments were acquired at an average price of $66,357 per BTC, with an aggregate cost of approximately $33.1 billion, including associated fees and expenses.

Unlike traditional bonds, perpetual preferred stock like STRK has no maturity date or redemption deadline. Instead, it offers indefinite fixed dividend payments as long as the company remains operational. STRK holders will have the option to convert their shares into Strategy’s class A common stock under specific conditions. If conversion occurs, investors may receive cash instead of fractional shares.

Additionally, Strategy retains the right to repurchase outstanding preferred shares for cash if the total market value drops below 25% of the originally issued amount or in the event of certain tax-related circumstances. The redemption price will be equivalent to the liquidation value, including any unpaid dividends, and in some cases, will be based on prevailing market prices.

Stockholders will also have the right to demand a buyback at liquidation value plus unpaid dividends if the company undergoes a "fundamental change," a major corporate event that could significantly impact its structure or financial standing.

On Friday, STRK shares closed down 2.1%, settling at $92.40. Meanwhile, Strategy’s class A common stock (MSTR) declined by 5.6%, closing at $287.18.