Strive announces $500 million perpetual preferred sale

Strive announced a new perpetual preferred share class, SATS, and plans to sell 5 million shares at $100 each to raise $500 million, CoinDesk reported on Oct. 13. Proceeds would be used to purchase additional bitcoin, acquire income-producing assets, or buy back stock.

The SATS shares carry a 15% fixed dividend paid daily and rank junior to Strive's existing SATA perpetual preferred. SATA pays a variable rate currently at 13%. At closing, Strive intends to establish a dividend reserve equal to the first 18 months of SATS payments.

On the stated terms, that fixed coupon costs $75 million a year, and the 18-month reserve works out to about $112.5 million. The new class pays 2 percentage points more than SATA's current variable rate while sitting behind it in the payment order.

Strive acquired 3,311 bitcoin last week, bringing holdings to 32,773 coins worth about $2.7 billion, up from below 20,000 coins three months earlier. CoinDesk noted that unlike most bitcoin treasury companies, including far larger peer Strategy, Strive has been able to significantly increase its bitcoin holdings in recent weeks.

This publication has argued that Strategy's bitcoin purchases are now the residual of its preferred stack. Strive's second perpetual preferred class suggests the same ordering at a smaller scale: preferred layers are claims ahead of common shareholders and carry recurring dividends that must be met.

The $500 million is a target rather than a completed raise, CoinDesk reported. The shares are intended to be sold at $100 each, and the bitcoin purchases the raise would finance remain contingent on that sale.