Bitcoin finance firm Strategy will proceed to depend on selling preferred shares to amass Bitcoin, moving away from its strategy of selling common shares, says CEO Phong Le.
“We will begin the transition from equity to preferred equity,” Le told Bloomberg’s “The Close” on Wednesday.
Stretch (STRC) is Strategy's perpetual preferred stock that launched in July and is aimed toward buyers searching for stability with an annual dividend of over 11%.
STRC is the corporate's fourth perpetual preferential offering launched to fund its Bitcoin (BTC) purchases. This is a substitute for issuing latest shares, which dilute the share price.
Strategy CEO Phong Le appears on Bloomberg's “The Close” on Wednesday. Source: YouTube
Le admitted that his preferred stock would require “some seasoning” and marketing to introduce the offering to traders, but added: “We expect Stretch to be an enormous product for us later this yr.”
Strategy could resume offers if STRC hits $100
STRC regained its $100 face value at Wednesday's close for the primary time since mid-January, which Le said was the “story of the day.”
The stock had fallen below $94 earlier this month as Bitcoin plunged below $60,000, but with it now trading at par – the worth set as the ground by the strategy – the corporate could offer shares again to fund further Bitcoin purchases.
Bitcoin traded mostly flat over the past 24 hours at around $66,800, off an intraday high above $68,000.
Buying Bitcoin Treasuries Is a “Distraction” Among Rivals
Analysts have warned that the crypto treasury space is becoming crowded as corporations compete for a small segment of traders, leading to some corporations' crypto holdings being value greater than the businesses themselves.
In this case, some analysts said rival treasury firms could acquire underperforming corporations to snap up Bitcoin cheaply, but Le said Strategy was not keen on such a move.
“I believe in any latest market, be it electric cars or AI or SaaS software, you need to deal with your core product,” Le said. “I believe it might be a distraction to purchase one other digital asset treasury company at a reduction to net asset value.”
Shares in Strategy (MSTR) ended trading down over 5% at $126.14 on Wednesday.
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