Strategy, previously known as micro strategy, revealed that the more than $ 700 million insured of a recent preferred share that has been designed to buy more Bitcoin.
On March 21, the company confirmed The sale of 8.5 million shares of his series A Petual Strf Preferred Stock. Each share cost $ 85 and offered an annual dividend of 10%.
Strategy’s Strf was initially intended to collect $ 500 million, but it exceeded the target by more than 40% by collecting $ 711 million.
This newest edition does not allow a conversion in ordinary shares, in contrast to the previous STRK offer from the company, which came with an efficiency of 8% and conversion rights.
Jeff Park, head of Alpha Strategies in Bitwise, noted Those investors hunger for STRF was powered by fixed interest rather than exposure to the volatile shares of the strategy.
He noted that the higher yield and improved price conditions contributed to the stronger response, which contributed to STRF that collected more funds than STRK.
Can strategy maintain his bitcoin-first model?
While the capital increase increases the purchasing power of the strategy, concerns about the ability of the company are growing to manage long -term obligations in the long term.
Strategy is more than 499,000 BTC – for more than $ 40 billion – and has built its business identity around aggressive Bitcoin -accumulation. However, the decision to prevent the sale of Holdings has left the company with limited liquidity.
Bitwise pointed out that this situation led to a decrease in liquidity ratios. The cash ratio has fallen from 2.10 in 2019 to only 0.11 in 2024.
However, Bitwise claims that the bankruptcy risk remains low. Even under a serious scenario – Bitcoin drops to $ 30,000 in September 2027 – the company should only liquidate about 7.3% of its bitcoin to meet a bond obligation of $ 1.1 billion.
Nevertheless, Bitwise has proposed new strategies to strengthen the cash flow of the company. One recommendation includes borrowing half of his bitcoin with an annual return of 4%, which can generate sufficient income to cover interest payments and dividends.
Another approach includes covered on -call options, a method that has already been adopted by companies such as the Japanese metaplanet.
BitWise concluded that the recent implementation of FASB would enable strategy to report BTC companies at their real market value, which would be:
“Enabling the company to display Bitcoin interests more accurately, which leads to a higher reported book value and more transparent financial data. As a result, the profit volatility of the strategy will decrease, so that its financial statements will be better tailored to its long-term bitcoin strategy.”
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