Strive raising $500 million to buy additional bitcoin with new preferred share class
Summary
Strive is raising five hundred million dollars through a new class of preferred shares to purchase more bitcoin. The SATS shares will feature a fixed fifteen percent dividend yield at par. This new offering sits junior to the company's existing variable rate shares.
SATS will offer a fixed 15% dividend yield at par and be junior to the company's existing SATA, which pays a variable rate (currently 13%).
Strive (NASDAQ: ASST) plans to sell 5 million shares of its new Series A Perpetual SATS Preferred Stock at a stated amount of $100 per share, targeting about $500 million. Dividends are cumulative, with regular payments scheduled to begin Nov. 9, and the company says it will set aside a reserve covering the first 18 months of payouts. Proceeds can go toward more bitcoin, working capital, acquisitions or buybacks.
The offering comes a day after Strive disclosed it bought 3,311 BTC between Oct. 5 and Oct. 9 at an average of about $84,500, roughly $280 million, its largest purchase since January. That brings its holdings to 32,773 BTC, fifth among public companies behind Strategy, Metaplanet, Twenty One and MARA.
Our Take
For ASST traders, this is a share-supply story first. Class A shares outstanding rose by about 9.5 million last week as investors exercised roughly $208 million in warrants ahead of Tuesday's expiration. A preferred raise lets Strive keep buying bitcoin without printing more common stock, which is the bullish read.
The bearish read is the cost. A fixed 15% on $500 million works out to about $75 million a year in dividends, on top of the 13% floating rate on SATA. That model only works while bitcoin holds up and the market keeps paying a premium for the stock. Stocktwits sentiment turned bearish after the news, with traders complaining about warrant dilution.
Levels for Wednesday:
- ASST closed Tuesday at $27.59 (-0.4%) and traded near $27.65 overnight. Its 52-week range is $7.02 to $36.20.
- Resistance: Tuesday's high at $28.32. A break above it with volume would put the stock back in momentum mode.
- Support: the $27.09 after-hours low. Losing it would suggest the dilution worries are winning.
- Tell: watch SATA, which closed near $98.79. If it slips further below $100 once SATS prices, demand for Strive's preferreds is cooling.
Bitcoin direction matters more than anything else here. ASST trades as a leveraged bitcoin proxy, so check BTC before the open.
Sources: The Block ยท Stocktwits
Source: Read the full story at CoinDesk: Bitcoin, Ethereum, Crypto News and Price Data