Warning: The analyst who wrote this piece has strategy shares (MSTR).
Strategy (MSTR), the American company which has purchased Bitcoin (BTC), a key corporate policy, has recently expanded its financial toolbox with the introduction of a second, privileged actions series, adding to its growing range of capital market instruments.
The company sells 8.5 million shares in the new offer, called Strife (STRF), at $ 85 each, which gives it a net of $ 711.2 million for Bitcoin purchases. This represents an initial objective of $ 500 million. The sale ends later Tuesday. The privileged previous program of the strategy, Strike (Strk), initially raised $ 563 million.
A perpetual privileged actions is between debt and common equity in the capital structure, generally offering dividends and greater price stability. This makes it attractive for investors looking for lower volatility and more predictable yields. Unlike ordinary shares, holders do not obtain the voting rights.
Strf pays an annual dividend of 10% out of an amount indicated of $ 100, with payments made quarterly in cash. If the strategy is missing a dividend, the amount is composed of an additional 1% per year each up to a maximum dividend rate of 18%, creating an incentive for appropriate payment payments.
The strategy can exchange all STRF shares if less than 25% of the initial emission remains or under certain tax events, in which case shareholders would receive the preference for liquidation plus any unpaid dividend. In addition, in the event of “fundamental change”, holders may force the company to buy their shares to the amount indicated more the accumulated dividends.
Strk lower dividends
On the other hand, Strk offers an annual dividend of 8% on the basis of its liquidation preference of $ 100, although the effective yield decreases as the price of STRK increases. Unlike Strf, STRK includes a conversion function, allowing holders to exchange their favorite shares in ordinary shares to a 10: 1 ratio if the ordinary action price reaches $ 1,000, offering equity. This means that the new problem works even more as a fixed income security, which makes it the least volatile of the two.
While Strk can call on investors looking for a mixture of yield and potential appreciation of capital, the STRF clearly targets those who give priority to income and the stability of capital. To support these dividend payments, the strategy will be based on a combination of operational cash flows, the product of convertible debt offers and sales of action at stake (ATM) on ordinary actions.
The strategy also has an ATM program open in place for Strk, recently purchased 130 BTC, and has about 3.57 billion dollars on its ATM capacity through ordinary actions, which gives it significant flexibility to finance dividend commitments while continuing to continue its Bitcoin accumulation strategy.
The actions of the company increased by more than 10% on Monday, when it held 506,137 BTC.
