Strategy to Raise $2B Via Stock Offering to Buy More BTC: Report

Business intelligence and Bitcoin treasury firm, Strategy, is looking to raise $2 billion via a stock offering. As usual for the company, the proceeds of the sale will be used to acquire more bitcoins (BTC) and for other corporate purposes.

A Bloomberg report, citing people familiar with the matter, revealed that the stock offering was initially intended to raise $500 million. However, information that has come to light is that Strategy has expanded the offering to $2 billion upon the sale of 5 million shares.

Strategy’s New Equity Offering

According to unidentified sources, Strategy will handle the deal at noon on Thursday in New York. The Series A Perpetual Stretch preferred shares are to be priced at $90 each. The price represents the bottom of the marketed range and a discount to their face value of $100.

Unlike Strategy’s previous preferred stock offerings, this one will carry an initial dividend of 9%. The cumulative dividends of the offering have an unfixed rate. Strategy may alter the dividend rate by any amount upward through the start of each month. However, downward adjustments will be limited to a maximum of 0.25% per annum.

The new stock will rank higher than Strategy’s Strike and Stride preferred offerings, as well as the company’s common stock. But the offering will remain junior to the firm’s Strife preferred stock and convertible bonds issued in the past.

Wall Street giants, including Morgan Stanley, TD Securities, Moelis & Co., and Barclays, are working on participating in the deal. At the time of writing, Strategy had yet to make an official announcement regarding the new equity offering.

Strategy Holds 607K BTC

The latest development comes just three days after Strategy announced its most recent purchase, which pushed its BTC holdings above 600,000. On Monday, the company disclosed that it had acquired 6,220 BTC, valued at approximately $739.8 million, based on bitcoin’s price at the time.

Strategy now holds 607,770 BTC valued at $72.48 billion. The company sits on a 66% unrealized profit totaling $28.8 billion. Upon completion of the new equity offering, Strategy’s bitcoin holdings could exceed 624,000 BTC. This will bring the company closer to its goal of becoming a Bitcoin bank.

Meanwhile, Strategy has achieved a BTC Yield of more than 20% year-to-date.