Strategy Buys $45 Million In Bitcoin, Plans Euro-Denominated STRE Offering To Fund More

Michael Saylor’s Strategy has bought $45 million Bitcoin and plans a euro-denominated preferred stock offering (STRE) to fund more BTC buys.

The company disclosed in a Securities and Exchange Commission (SEC) filing that it purchased 397 Bitcoin last week at an average price of $114,771, bringing its total holdings to 641,205 BTC bought for $47.49 billion and currently worth about $66.7 billion.

In a separate press release, Strategy said it plans to sell 3.5 million euro-denominated perpetual preferred shares, or STREs, to fund future Bitcoin purchases and other corporate needs. The offering remains subject to market conditions, it said

Each STRE share carries a €100 face value and a 10% annual dividend, payable quarterly from late 2025 if declared. Missed payments will accrue interest and rise by one percentage point annually until paid.

If there is a case where Strategy misses a dividend payment, the amount that was meant to be paid will earn extra interest that compounds each quarter, the company said. In such a scenario, the dividend rate will rise by 1% per year until Strategy catches up. 

Strategy also said that if it is unable to pay any dividends to STRE share holders, it has to issue a “notice of deferral.” The company will then try to raise funds to pay investors their dividends within 60 days. To cover these missed payments, Strategy said it may look to sell other classes of its stock.

Strategy can also choose to buy back or redeem all STRE shares in cash under two conditions. The first condition is that fewer than 25% of the originally issued shares remain outstanding, while the second is if certain tax-related events occur. 

Strategy Builds On Existing Preferred Stock Offerings

The STRE offering is the latest addition to Strategy’s range of preferred stock offerings, which include STRF, STRK, STRD, and STRC.

STRF offers investors cumulative dividends at a fixed rate of 10% per annum on a stated amount regardless of whether dividends are declared, while STRK offers a fixed dividend rate of 8% per annum and includes a conversion feature. 

Meanwhile, STRD has a 10% annual dividend rate. Lastly, STRC gives investors dividends that adjust monthly and that are paid in cash when declared by the company.

Strategy has already started using some of the proceeds from those stock offerings to purchase Bitcoin.

Strategy started purchasing Bitcoin back in 2020, and is the pioneer behind the digital asset treasury (DAT) model. Numerous companies have followed Strategy’s lead, and some have applied the model to cryptos including Ethereum (ETH), Toncoin (TON),  and Solana (SOL). 

Its buying activity has slowed recently. In October, it bought 778 BTC, one of the smallest monthly acquisitions in recent years. In September, it bought 3,526 BTC.

Strategy’s Share Price Plunges

Strategy’s stock has dropped more than 10% this week, and over 28% in the past month.

MSTR price (Source: Google Finance)