Strategy Inc, a publicly traded company known for its Bitcoin treasury strategy and AI-powered enterprise analytics software, announced its intention to launch an initial public offering (IPO) of 3,500,000 shares of its 10.00% Series A Perpetual Stream Preferred Stock (STRE Stock). Proceeds from the offering are earmarked for general corporate purposes, including further Bitcoin acquisitions and working capital.
The STRE Stock is designed to accumulate cumulative dividends, referred to as “regular dividends,” at an annual rate of 10.00% on a stated amount of €100 per share. These regular dividends are scheduled to be payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, commencing on December 31, 2025, and will be disbursed solely in cash, subject to declaration by Strategy’s board of directors.
Should any accumulated regular dividend on the STRE Stock not be paid on its due date, additional regular dividends, termed “compounded dividends,” will begin to accrue on the unpaid amount, compounded quarterly. The initial compounded dividend rate for an unpaid regular dividend will be 10% plus 100 basis points per annum. This rate will increase by 100 basis points per annum for each subsequent regular dividend period until the unpaid regular dividend and its compounded dividends are fully paid, up to a maximum rate of 18% per annum.
A failure to declare a regular dividend by a given record date will result in a notice of deferral. In such instances, Strategy Inc will aim to sell STRK Stock, STRD Stock, class A common stock, or other junior stock within 60 days to generate sufficient proceeds to cover the deferred dividends and compounded dividends. This ability is contingent on the prior payment of accumulated dividends on Strategy’s STRF Stock and STRC Stock, as well as adherence to the terms of any other dividend senior stock.
Strategy Inc retains the right to redeem all, but not less than all, of the STRE Stock at its discretion. This redemption right can be exercised if the total number of outstanding STRE Stock shares falls below 25% of the total number of shares originally issued in this offering and any future offerings. Additionally, Strategy Inc may redeem all STRE Stock if certain tax events occur. The redemption price will be a cash amount equivalent to the liquidation preference of the share at the business day preceding the redemption notice date, plus any accumulated and unpaid regular dividends up to the redemption date.
Holders of STRE Stock will have the right to require Strategy Inc to repurchase some or all of their shares if an event constituting a “fundamental change” occurs, subject to certain limitations. The cash repurchase price in such an event will be the stated amount of the STRE Stock to be repurchased, plus any accumulated and unpaid regular dividends.
The liquidation preference of the STRE Stock will initially be €100 per share. This preference will be adjusted daily to be the greatest of (i) the stated amount per share, (ii) the last reported sale price per share on the trading day immediately prior to any business day on which Strategy has executed a sale transaction settled by STRE Stock, or (iii) the arithmetic average of the last reported sale prices per share for the ten consecutive trading days preceding such business day.
Barclays Bank PLC, Morgan Stanley & Co. International plc, Moelis & Company LLC, SG Americas Securities, LLC, TD Securities (USA) LLC, Canaccord Genuity Limited, and StoneX Financial Inc. are serving as joint book-running managers for the offering.
The offering is being conducted under an effective shelf registration statement filed with the U.
S. Securities and Exchange Commission (SEC). The offering will be made exclusively through a prospectus supplement and an accompanying prospectus. These documents are available on the SEC’s website.
Strategy Inc, based in Tysons Corner, Virginia, identifies itself as the world’s first and largest Bitcoin Treasury Company. As a publicly traded entity, it has adopted Bitcoin as its primary treasury reserve asset. The company utilizes proceeds from equity and debt financings, alongside cash flows from operations, to strategically acquire Bitcoin and promote its role as digital capital. Its treasury strategy aims to provide investors with varying degrees of economic exposure to Bitcoin through a diverse range of securities, including both equity and fixed-income instruments. Beyond its Bitcoin strategy, Strategy Inc offers AI-powered enterprise analytics software under its “Intelligence Everywhere” vision. The company leverages its development capabilities to explore innovations in Bitcoin applications, integrating analytics expertise with its commitment to digital asset growth.
For prospective investors in the European Economic Area (EEA) and the United Kingdom (U.
K.), the STRE Stock offering is strictly limited to ‘qualified investors’ or ‘professional clients’ and ‘eligible counterparties,’ as defined by respective regulations. The STRE Stock is not intended for offer, sale, or availability to retail investors in either the EEA or the U.
K., in compliance with the Prospectus Regulation, MiFID II, Insurance Distribution Directive, PRIIPs Regulation, and their U.
K. domestic law equivalents.
