Michael Saylor’s Strategy is seeking to raise at least $500 million from its latest sale of preferred equity, offering a variable-rate security to fund more Bitcoin purchases.
Bitcoin’s biggest corporate owner, which is known formally as MicroStrategy Inc., is marketing 5 million shares of Series A Perpetual Stretch preferred shares with an initial dividend rate of 9%, according to a statement Monday.
The preferred shares are being marketed at $90 to $95 each, according to people familiar with the matter, a discount to their face value of $100 per security.
Morgan Stanley, Barclays Plc, Moelis & Co. and TD Securities are working on the deal, according to the people, who asked not to be identified as the information isn’t public. The offering is expected to price on Thursday, the people said.
Strategy’s common shares climbed 0.4% to $428 each in after-market trading as of 5:43 p.m. Monday. Shares in the firm, which holds more than $71 billion worth of Bitcoin, have climbed 47% through Monday’s close, valuing it at $119 billion.
The new preferred stock will rank senior to Strategy’s Strike and Stride preferred stock and its common stock, but junior to its Strife preferreds and the convertible bonds it has issued in the past, the people said.
Unlike Strategy’s other preferreds, the Stretch securities will pay cumulative dividends and the dividend rate is not fixed. Strategy may adjust the dividend rate at the start of each month upward by any amount and downward by the maximum of the sum of 0.25% per annum and the decline in the one-month SOFR rate, the statement shows.
