Strategy Launches $2 Billion Bitcoin-Backed Preferred Stock Offering
Strategy (MSTR) is introducing its $2 billion “Stretch” Preferred Stock (STRC) offering, featuring a variable 9% dividend aimed at maintaining a share price around $100. The offering does not provide direct bitcoin exposure but is backed by the asset's structure.
Key points include:
- Strategy holds $71.7 billion in bitcoin against $11 billion in liabilities.
- Historically, bitcoin has averaged 3%-4% annual returns over five-year periods.
- Strategy plans to leverage these returns to sustain high payouts without liquidating its crypto holdings.
- Investor interest led to the offering size increasing from $500 million to $2 billion.
- STRC functions as a yield vehicle, resembling a money-market fund with cryptocurrency backing.
According to NYDIG, STRC aims to provide higher yields than traditional short-term instruments while maintaining a different liquidity profile.