Michael Saylor’s Strategy ups its stock offering to $1B, quadrupling plans to fund more Bitcoin buys as part of its long-term accumulation strategy.
To finance more Bitcoin purchases, Michael Saylor’s Strategy, the biggest corporate Bitcoin holder in the world, intends to raise about $1 billion through a stock offering.
The business will issue 11,764,700 shares of 10.00% Series A Perpetual Stride Preferred Stock, headed by executive chairman Michael Saylor, for $85 a share in the first public offering.
According to a June 6 release, Michael Saylor’s Strategy projects that, after subtracting the underwriting discounts and commissions for the firm’s offering expenditures, the net proceeds will generate approximately $979.7 million.
The nearly $1 billion would be used for “general corporate purposes, including the acquisition of Bitcoin and for working capital,” according to the company’s plans.
In addition to introducing a new financing avenue beyond the company’s traditional usage of convertible debt and common stock, the action quadruples the $250 million raise that was previously reported.
On the other hand, professional and institutional investors will receive non-cumulative dividends equivalent to 10% of the specified amount from Strategy’s perpetual preferred stocks.
The $1 billion would allow Michael Saylor’s Strategy to buy an extra 9,633 Bitcoin at the current price of $103,800 per coin, much more than its most recent acquisition of 705 Bitcoin for $75.1 million, which was revealed on June 2.
Bitcoin Premium For Michael Saylor’s Strategy Rises To +112%: VanEck
VanEck claims that Strategy’s Bitcoin premium has increased to more than 112% compared to spot prices.
In a research study released on May 22, the asset management stated, “We calculate a +112% premium to the combined fair value of MSTR’s BTC and core software business, driven by expectations of future BTC accumulation, regulatory advantages, and speculative positioning.”
Markus Thielen, head of ResearchResearch and CEO of 10x ResearchResearch, told Cointelegraph, “The company keeps the difference and presents it as Bitcoin yield every time MicroStrategy issues new shares to retail investors — shares backed by Bitcoin worth only a fraction of the stock price.”
The premium is less than that of Japanese investment firm Metaplanet’s Bitcoin premium, which skyrocketed to $596,154 on May 27.
This means that investors are paying more than five times as much for Metaplanet shares that provide exposure to Bitcoin.
According to a May 27 analysis by 10x Research Research, investors unaware of the significance of a company’s net asset value (NAV) may be “dramatically overpaying for their Bitcoin exposure” on a position that offers no further upside leverage.
