Michael Saylor-led Strategy (formerly MicroStrategy) announced on July 2 that it has signed a $4.2 billion sales agreement with five investment banks—TD Securities, Barclays, Morgan Stanley, Benchmark Company, and Clear Street—to sell shares of its newly created Variable Rate Series A Perpetual Stretch Preferred Stock (STRC). The proceeds will be primarily used to acquire additional Bitcoin.
Under the terms, shares will be sold gradually through at-the-market (ATM) offerings or negotiated transactions. The banks will act as sales agents and receive up to 2% of the gross proceeds from any sale; none of the firms are obligated to sell a specific amount. “We view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin,” Strategy stated. “We have not set any specific target for the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin.”
Key Terms of the STRC Preferred Stock
Each share of STRC carries a $100 liquidation preference and pays cumulative monthly dividends. The initial dividend rate is set at 9.00% annually, beginning July 29, 2025. The company has the ability to adjust the dividend rate within certain limits to help maintain the stock price near $100. According to the offering document, “The dividend rate may be fixed or variable or both. The dividend rate may vary based on the price of bitcoin, the ratio of bitcoin we hold compared to our outstanding indebtedness or other reference metrics tied to the price of bitcoin or our holdings of bitcoin.”
The company may redeem shares at $101 plus any unpaid dividends, as long as at least $250 million worth of shares remain outstanding. It also holds the right to redeem all shares if the total number falls below 25% of the combined initial and future offerings, or if a tax-related event occurs. Shareholders may require STRC to repurchase their shares at face value plus dividends if a fundamental change takes place.
Use of Proceeds and Strategic Outlook
“We intend to use the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin and for working capital, and may also use the net proceeds for the payment of cash dividends declared or expected to be declared by the board of directors from time to time on shares of any class or series of our preferred stock, other than the STRC Stock, then outstanding,” the company mentioned. This financing continues Michael Saylor's strategy of using debt-like instruments to accumulate Bitcoin. Strategy currently holds one of the largest Bitcoin treasuries among public companies. The 9% annual dividend on STRC may attract yield-seeking institutional investors, though the flexible dividend structure tied to Bitcoin price introduces additional uncertainty.