MicroStrategy Proposes IPO of Bitcoin-Backed Preferred Stock with Adjustable Dividend Rates

Strategy, a Nasdaq-listed company known for its significant Bitcoin investments and enterprise analytics software, has announced its intention to conduct an initial public offering (IPO) of 5,000,000 shares of Variable Rate Series A Perpetual Stretch Preferred Stock, referred to as STRC Stock. This offering, which is subject to market and other conditions, will be registered under the Securities Act of 1933. The proceeds from the IPO will be used for general corporate purposes, including the acquisition of additional Bitcoin and for working capital. Each share of STRC Stock will have a stated amount of $100, and dividends will accumulate cumulatively at a variable rate per annum. Initially, the annual dividend rate will be 9.00%, payable monthly in arrears starting on August 31, 2025. Strategy reserves the right to adjust the dividend rate, with adjustments limited to no more than 25 basis points plus the difference between the one-month term SOFR rate and the lowest SOFR rate during the preceding month. Dividends must be fully paid before any reduction can occur, and the goal is to maintain the stock price near the stated amount. Holders of STRC Stock will have the right to require Strategy to repurchase their shares in the event of a fundamental change, such as a significant corporate reorganization or change in control, at a price equal to the stated amount plus any unpaid dividends. The liquidation preference of the STRC Stock, initially set at $100 per share, will be adjusted daily to the highest of the stated amount, the last reported sale price, or the average sale price over the previous ten trading days. Strategy also has the option to redeem the STRC Stock for cash at any time, provided the stock is listed on a major exchange. The redemption price will be $101 per share plus any accumulated and unpaid dividends. Clean-up and tax redemptions are possible if the outstanding shares fall below certain thresholds or if specific tax events occur, respectively. The redemption price for these scenarios will be the liquidation preference plus any unpaid dividends. Morgan Stanley, Barclays, Moelis & Company, and TD Securities are serving as joint book-running managers for the offering, while The Benchmark Company, Clear Street, AmeriVet Securities, Bancroft Capital, and Keefe, Bruyette & Woods are acting as co-managers. The offering will be made through a prospectus supplement and accompanying prospectus, available on the SEC's website or by contacting the managers. This strategic move by Strategy highlights its commitment to leveraging financial markets to support its Bitcoin and analytics initiatives. The dual focus on Bitcoin accumulation and technological innovation positions the company as a leader in both the digital asset and enterprise analytics sectors. Industry analysts view this offering as a significant step in diversifying Strategy's capital structure and enhancing its ability to compete in the rapidly evolving tech and cryptocurrency landscapes. Company Profile: Strategy, formerly MicroStrategy Incorporated, is the world's first and largest Bitcoin Treasury Company. It is publicly traded and uses proceeds from equity and debt financings, as well as operational cash flows, to accumulate Bitcoin and advocate for its adoption. The company also offers AI-powered enterprise analytics software, aligning its treasury strategy with technological advancements to create a "Intelligence Everywhere" vision. This unique combination of operational excellence, strategic Bitcoin reserve, and innovative technology aims to drive long-term value for investors. Forward-Looking Statements: The press release includes forward-looking statements regarding the IPO's size, timing, and intended use of proceeds. These statements are subject to risks and uncertainties, including market conditions and regulatory requirements. Strategy disclaims any obligation to update these statements based on new information or future events. For more detailed risk factors, refer to the company's SEC filings.