Strive (ASST), a Nasdaq-listed asset manager with a bitcoin treasury strategy, announced Monday its intention to launch an initial public offering of a new class of preferred shares intended to pay dividends.
The Series A Perpetual Floating Rate Preferred Stock, called SATA, aims to pay an initial annual dividend of 12%, paid monthly in cash. The company is set to offer 1.25 million SATA to investors, raising funds to acquire more BTC and expand its operations, while proceeds could also be used for income-generating assets, working capital, or common stock buybacks. Strive currently holds just under 6,000 BTC, valued at around $637 million at current prices, an amount that will rise to around 11,000 coins if it completes its stock merger with Semler Scientific (SMLR).
A near-relentless sell-off of its common stock since striking a SPAC deal several weeks ago has left Strive trading at a price lower than the value of bitcoin on its balance sheet (an mNAV of less than 1). Thus, issuing common stock for continued bitcoin purchases would have a highly dilutive effect on existing shareholders.
The move to issue preferred shares follows in the footsteps of pioneering treasury company Bitcoin Strategy, which began issuing various classes of preferred shares to expand its capital raising options for BTC purchases.
Once again, a nod to Saylor and his team. Strive said it plans to maintain SATA’s trading range between $95 and $105 per share by adjusting dividend rates within set limits. If dividends are not paid, the rate accrues monthly, eventually reaching up to 20% per year, according to the press release.
Barclays and Cantor Fitzgerald will act as joint bookrunners for the offering, with Clear Street acting as co-manager. A dividend reserve of $12 per share will be set aside to cover the first year of distributions.
ASST shares are down 2.3% on Monday, alongside a 4% drop in bitcoin’s price to $106,000. SMLR is down 2.5%.
The offering comes as digital asset Treasury stocks have collapsed in recent months, with many now trading below the value of the underlying holdings, limiting their ability to raise new funds to continue their crypto purchases.
