- Michael Saylor’s strategy launched and upsized a new preferred stock offering from $500 million to $2.8 billion.
- The “Stretch” security promises a hefty 9% annual payout with no fixed maturity and a flexible, adjustable dividend.
- The deal is the latest step in Saylor’s years-long effort to turn Strategy into a corporate vehicle for accumulating Bitcoin.
Michael Saylor’s relentless drive to transform his company, Strategy, into a financial engine for buying Bitcoin has reached a new level of ambition.
The company introduced and quickly increased a fresh preferred-share offering, ultimately raising a staggering $2.8 billion—a move that highlights Saylor’s adeptness in the capital markets and investors’ strong appetite for crypto exposure.
As cryptocurrency prices continue their upward trend, Saylor’s Bitcoin-holding company, Strategy, again demonstrated an ability to tap market enthusiasm. The firm priced a new class of security on Thursday, branded “Stretch.” That instrument promises buyers a generous 9% annual distribution with no set maturity—a notable feature in the often complex world of preferred stock.
Originally planned as a $500 million deal, the offering was upsized to $2.8 billion due to overwhelming demand, according to a person familiar with the transaction who requested anonymity.
The move is the latest—and perhaps boldest—example of Saylor’s Wall Street maneuvering in his long-running effort to pivot a mid-sized software company, formerly known as MicroStrategy, into a corporate entity singularly focused on one objective: raising as much capital as possible to acquire as much Bitcoin as possible.
At the most recent tally, the company’s treasury held roughly 600,000 coins, valued at about $70 billion.
“This is not Strategy’s first financial-engineering initiative,” said Campbell Harvey, a professor at Duke University. “Whenever your company trades at a multiple well above its fundamental value, you raise capital.”
Since Strategy’s first high-profile Bitcoin purchase in 2020, Saylor has used a broad range of financial tools, including equity sales, multiple types of debt issuances, and layered stacks of preferred stock.
In doing so, he has not only built a colossal Bitcoin treasury but also inspired numerous imitators and helped spawn a new class of public companies dedicated to the so-called “treasury strategy” of buying and holding cryptocurrencies.
“Stretch” security: a new twist on a familiar theme
Many of the financial instruments that fueled Strategy’s rise have proved more popular than expected, but even by that standard, demand for “Stretch” was notable.
The company’s common shares rose 0.5% on Wednesday and are up an impressive 43% for the year.
The new “Stretch” shares occupy a particular place in Strategy’s complex and unconventional capital structure.
They rank above the company’s common equity and its other preferred shares—bearing creative names like “Strike” and “Stride”—but remain junior to convertible notes and another preferred issue called “Strife.”
One key feature that sets “Stretch” apart from earlier offerings is its flexible dividend. Unlike a fixed coupon, this security allows Strategy to adjust the dividend rate. Each month, the firm will set a new payout rate intended to keep the security’s trading price near the $100 mark, raising or lowering the dividend as needed to maintain that target. It’s a blend of a dynamic pricing model and a trust-building mechanism—and a reminder that in the world of financial engineering, Strategy often makes its own rules.
Diminishing returns? A discount to win investors
While that flexibility may appeal to Saylor’s large and dedicated retail following, it also introduces another layer of uncertainty into an already intricate capital structure.
There are signs that Saylor’s tactics may be encountering diminishing returns, as the company’s valuation relative to the Bitcoin it owns has reportedly decreased.
To entice investors for its latest offering, Strategy sold “Stretch” shares at a discount. The shares, carrying an initial dividend set at 9%, were priced at $90 apiece.
That price was at the low end of the marketed range and represented a discount to the $100 par value, according to the person familiar with the deal.
Despite the discount, the strong demand for the transaction is the latest and most powerful sign of both Saylor’s enthusiastic following and the continuing speculative fervor coursing through the markets.
According to a previous Bloomberg report, major financial firms including Morgan Stanley, Barclays Plc, Moelis & Co. and TD Securities were involved in arranging the landmark deal.