Strategy (MSTR) has priced the initial public offering of 28,011,111 shares of its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) at $90 per share, raising approximately $2.47 billion in net proceeds, according to a press release. Settlement is expected on July 29.
STRC will accrue cumulative dividends at a variable annual rate on a $100 stated amount per share, with an initial monthly regular dividend rate of 9.00% per annum, payable monthly in arrears beginning August 31. Strategy retains the right to adjust the dividend rate for future periods, subject to restrictions limiting cuts to no more than 25 basis points plus any excess one-month SOFR spread and prohibiting reductions below the prevailing SOFR rate or if prior dividends remain unpaid.
The announcement comes days after Strategy announced the STRC IPO, intending to raise just $500 million. The current details indicate an oversubscription of five times the initial offer.
Read More: Strategy announces “Stretch” Preferred Stock, competing with money market funds
At its election, Strategy may redeem all or part of the STRC shares outstanding on or after listing on the Nasdaq Global Market, Nasdaq Global Select Market, or NYSE at a cash redemption price of $101 per share plus accrued dividends, provided at least $250 million of STRC Stock remains outstanding. The company also may effect a “clean-up” redemption if less than 25% of the original issuance remains or a tax redemption upon specified events. Holders may require Strategy to repurchase shares following a fundamental change at a price equal to the $100 stated amount plus accrued dividends. The liquidation preference, initially $100 per share, will be adjusted daily to the greater of the stated amount, the previous trading day’s closing price, or the ten-day average closing price.
Morgan Stanley, Barclays, Moelis & Company and TD Securities are acting as joint book-running managers, with The Benchmark Company, Clear Street, AmeriVet Securities, Bancroft Capital, Keefe, Bruyette & Woods and Maxim Group as co-managers.
Since the start of 2025, Strategy has launched three other series of preferred shares: STRK, STRF, and STRD. The initial offerings for these three have ranged from $563 million to just under $1 billion, making STRC’s $2.47 billion the largest initial offering by a wide margin.
Strategy intends to purchase bitcoin with the proceeds.
At time of publication, MSTR is down 2.4% during pre-market hours.
