Strategy to offer 2.5 million new 'Stride' preferred shares to fund its bitcoin buying spree

Strategy, the largest corporate holder of bitcoin, said Monday it intends to sell 2.5 million shares of perpetual preferred shares called Stride (STRD) as part of its continued effort to stockpile bitcoin.

"Strategy intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of bitcoin and for working capital," the company said in a statement . The offering is for 2,500,000 shares of Strategy’s 10% Series A Perpetual Stride Preferred Stock, the company said.

The offering is for "institutional investors and select non-institutional investors," Strategy added.

The company also recently offered the public other preferred shares, labeled Strike (STRK) and Strife (STRF) , in addition to its effort to raise $84 billion — split evenly between equity and debt — to fund future bitcoin purchases. STRK and STRF are convertible preferred stocks that offer a yield of 13% and 10%, respectively.

Strategy co-founder and Executive Chairman Michael Saylor has called Strife and Strike "the first AI-designed securities."

Both STRD and STRF offer a 10% dividend and cannot be converted into common Strategy shares. "Holders of the STRD Stock will be entitled to receive non-cumulative dividends at a rate per annum equal to 10.00% on the stated amount," the company said.

Perpetual preferred shares, unlike bonds, have no maturity date or required redemption schedule. Instead, they offer fixed dividend payments for as long as the issuing company continues to operate. 

Bitcoin treasury playbook

Following its most recent purchase, Strategy said Monday it holds a total of 580,955 BTC  worth over $60 billion. Many companies have been examining the possibility of becoming cryptocurrency treasury companies after witnessing Strategy's success. The company's plan of stockpiling Bitcoin has caused Strategy's stock to more than double in price during the past year.

In its statement on Monday, Strategy also outlined under what circumstances it can redeem the STRD shares.

"Strategy will have the right, at its election, to redeem all, but not less than all, of the STRD stock, at any time, for cash if the total number of shares of all STRD stock then outstanding is less than 25% of the total number of shares of STRD stock originally issued in the offering and in any future offering, taken together," it said.

"In addition, Strategy will have the right to redeem all, but not less than all, of the STRD Stock if certain tax events occur," according to the statement.