According to a July 22 X post, Strategy has announced plans to launch an initial public offering of 5 million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock, commonly referred to as STRC Stock.
The offering, subject to market conditions and SEC registration, aims to raise approximately $500 million based on the stock’s $100 stated amount per share.
The company said net proceeds will be used for general corporate purposes, including acquiring bitcoin and funding working capital.
Strategy Variable Dividends and Redemption Rights
The STRC Stock will carry cumulative dividends at a variable annual rate, initially set at 9%. Dividends will be paid monthly in arrears, beginning Aug. 31, 2025, when declared by Strategy’s board and subject to funds being legally available.
Strategy may adjust the dividend rate but cannot lower it by more than 25 basis points plus certain market-based adjustments from the previous month, or below the prevailing one-month term SOFR rate. The company cannot reduce the dividend unless all accumulated dividends have been paid.
The company holds the right to redeem the preferred shares, in whole or part, once they are listed on Nasdaq or the New York Stock Exchange, at $101 per share plus unpaid dividends. A “clean-up” redemption would allow Strategy to redeem all shares if less than 25% of the originally issued STRC Stock remains outstanding. The company also retains the option to redeem all shares in response to specific tax events.
Shareholder Protections and Offering Details
If Strategy undergoes a “fundamental change,” as defined in the certificate of designations, holders will have the right to request the company repurchase their shares at the $100 stated amount plus any unpaid dividends.
The liquidation preference per share will be set at the greater of the stated $100, the most recent sale price if certain transactions occur, or the average price over the preceding 10 trading days.
Morgan Stanley, Barclays, Moelis & Company and TD Securities will act as joint book-running managers for the offering. The Benchmark Company, Clear Street, AmeriVet Securities, Bancroft Capital and Keefe, Bruyette & Woods will serve as co-managers.
The offering will be conducted under an effective shelf registration statement filed with the SEC and made only through a prospectus supplement and accompanying prospectus.
