Strive has rolled out a new preferred stock paying 15% annual dividends, backed by a bitcoin treasury worth roughly $3 billion. The company raised $630 million by selling the shares at a discount, giving investors a potential yield approaching 17%.
Key Takeaways
- Strive raised $630 million through its SATS preferred stock offering, priced at $90 per share.
- SATS carries a 15% annual dividend rate, with Strive planning daily business-day cash payments.
- Strive holds 36,818 BTC, while its SATA preferred stock ranks ahead of SATS in the capital structure.
Strive Raises $630 Million With New SATS Preferred Stock
The Dallas-based bitcoin treasury company closed an upsized initial public offering of 7 million shares of its Series A Perpetual Preferred Stock, branded SATS, priced at $90 apiece. Trading on the Nasdaq Global Market was expected to begin Oct. 20 under the ticker SATS. Each share carries a $100 stated value and accrues $15 in annual dividends. At the $90 offering price, that translates into an effective annual yield of approximately 16.7%, provided dividends are declared and paid in full.
Here’s the interesting wrinkle. Rather than distributing dividends quarterly, the bitcoin treasury firm Strive plans to pay them in cash every business day, beginning Nov. 9. The payments remain subject to board approval and available funds. Strive also established an initial dividend reserve of $157.5 million, enough to cover 18 months of payments on the newly issued shares.
Two Preferred Stocks, Two Different Positions in Line
Strive’s new SATS preferred shares join Strive’s existing SATA preferred stock, which carries a variable dividend rate of approximately 13% and is managed with the objective of trading near its $100 stated value. The distinction goes beyond yield. SATA ranks ahead of SATS for dividends and liquidation claims, while both sit above Strive’s common stock, ASST. SATS offers a fixed dividend rate but lacks SATA’s active price-management mechanism.
In other words, SATS investors receive a higher starting yield while accepting a junior position in the capital structure and potentially greater price fluctuations. The offering gives Strive another financing avenue without issuing additional common shares. Still, preferred dividends create substantial financial obligations, even when the company isn’t borrowing through conventional debt.
Strive’s Bitcoin Treasury Reaches 36,818 BTC
The financing arrives amid an aggressive accumulation campaign. Strive acquired another 4,045 BTC between Oct. 12 and Oct. 16, lifting its holdings to 36,818 BTC, worth approximately $3 billion at recent prices. CEO Matt Cole has outlined a strategy targeting a 60% to 70% amplification ratio while bitcoin trades below $100,000, using preferred capital to increase the company’s bitcoin exposure relative to common equity.
Proceeds from SATS may finance additional bitcoin (BTC) purchases, income-producing assets, working capital, and share repurchases. For common shareholders, that arrangement cuts both ways. Rising bitcoin prices can magnify gains, while falling prices leave common equity absorbing losses after senior claims.
Strive reports no consolidated debt and says its bitcoin remains unpledged. Yet its preferred securities carry substantial cumulative dividend commitments, making the company’s ability to generate cash and access capital markets an increasingly important part of the equation.
The curious proposition is that a company built around accumulating an asset that pays no income is now offering investors daily cash distributions to help finance even more of it.