Strategy raises $500M for Bitcoin expansion

Strategy, formerly known as MicroStrategy, has announced plans to raise $500 million through a preferred stock offering to further expand its Bitcoin (CRYPTO:BTC) holdings.

The company will issue 5 million shares of Series A Perpetual Strife Preferred Stock (STRF), each carrying a fixed 10% annual dividend payable quarterly, starting from June 30, 2025.

The STRF stock does not grant voting rights but offers priority in liquidation with a $100 per share liquidation preference.

If dividends are unpaid, they will compound at an additional rate, potentially reaching up to 18% annually.

Strategy's decision to raise capital through this offering reflects its ongoing strategy of building a large Bitcoin reserve.

The company recently added 130 more Bitcoin to its holdings, bringing its total to 499,226 BTC.

However, this move has not been universally well-received.

Some analysts warn that Strategy's aggressive Bitcoin acquisition could lead to market instability, while others question the company's ability to pay the promised dividends given its cash reserves.

"Saylor will bring the next Bitcoin bear market," noted by a pseudonymous crypto trader, highlighting concerns about the potential impact of Strategy's actions on the broader cryptocurrency market.

Despite these concerns, Strategy remains committed to its Bitcoin strategy, with Michael Saylor emphasising the asset's long-term value.

The offering is being managed by major financial firms, including Morgan Stanley and Citigroup.

At the time of reporting, the Bitcoin (BTC) price was $82,983.43.