Strategy’s Bitcoin Acquisition and Funding Expansion: A Financial Overview
Strategy has unveiled its plan to bolster its funding approach by issuing 5 million Series A variable rate perpetual preferred shares, designated as "STRC." These shares will provide a 9% annual dividend, based on a par value of US$100 (AU$153.44), with payments distributed monthly starting on 31 August. This initiative aligns with the company’s strategy to enhance its capital and facilitate future Bitcoin acquisitions.
Recently, Strategy made headlines by purchasing 6,220 BTC for a total of US$739.8 million (approximately AU$1.14 billion), resulting in an average cost of US$118,940 (AU$182,467) per Bitcoin. This acquisition significantly contributes to its already substantial Bitcoin portfolio, which now stands at 607,770 BTC, accounting for around 3.05% of the total Bitcoin supply of roughly 19.9 million coins. The current valuation of this portfolio exceeds US$72 billion (AU$110.47 billion).
Michael Saylor, the co-founder of Strategy, publicised the acquisition details on social media, highlighting the company’s continuing commitment to strengthen its Bitcoin holdings. The firm has seen its Bitcoin yield rise to 20.8% year-to-date, a metric introduced in 2024 to measure the performance of BTC holdings in relation to the company’s diluted shares.
Funding Model Evolution
Since transitioning from a software-focused company to one centred on digital assets in 2020, Strategy has leveraged a mix of debt and equity to fund its Bitcoin acquisitions. To date, the firm has invested approximately US$43.6 billion (AU$66.9 billion) in Bitcoin, with the average entry price being US$71,756 (AU$110,093) per coin.
The STRC share issuance represents the fourth class of preferred shares from the company, reflecting its ongoing strategy to enhance shareholder value while strategically expanding its Bitcoin inventory. Saylor’s recent insights on social media also forecast Bitcoin’s price potential, with some projections suggesting it could reach extraordinary values in the forthcoming years.
Conclusion
Strategy’s aggressive acquisition strategy and innovative funding approaches epitomise the dynamic nature of the cryptocurrency market. As the company continues to add to its Bitcoin holdings, the impact of its preferred shares on overall operations and investor sentiment remains to be seen, but the potential for growth is significant in an evolving financial landscape.
