Strategy Inc. Announces Proposed Initial Public Offering of Euro-Denominated Series A Perpetual Stream Preferred Stock
Strategy Inc. (Nasdaq: STRF / STRC / STRK / STRD / MSTR) has announced its intention to move forward with an initial public offering of its newly created 10.00% Series A Perpetual Stream Preferred Stock, referred to as STRE Stock, subject to market conditions and other customary regulatory considerations. The offering will be registered under the U.S. Securities Act of 1933, as amended, marking another strategic step in the company’s ongoing financing and capital allocation plans.
Under the proposed offering, Strategy plans to issue 3,500,000 shares of STRE Stock, which will be priced with a stated amount of €100 per share and denominated in euros. This euro-denominated preferred stock represents a distinctive financing approach in the U.S. market, reflecting Strategy’s international investor base and the company’s ongoing emphasis on diversifying capital sources.
Use of Proceeds: Supporting Corporate Strategy and Bitcoin Acquisition
Strategy reports that the net proceeds from the offering will be allocated for general corporate purposes, which include working capital requirements and potential corporate investments. Notably, the company states that the proceeds may also be used for the acquisition of bitcoin, aligning with Strategy’s broader treasury allocation strategy. The organization has gained industry attention for integrating bitcoin into its corporate finance model, viewing the digital asset as a long-term store of value and strategic reserve asset. This offering continues that direction by potentially increasing the scale of bitcoin holdings.
Dividend Structure: 10% Annual Rate With Compounding for Deferred Payments
The STRE Stock carries a 10.00% annual dividend rate, calculated based on the €100 stated amount per share. Dividends are cumulative, meaning that if declared dividends are not paid for any period, they will accrue and continue to accumulate.
Regular dividends will be payable quarterly in arrears on:
- March 31
- June 30
- September 30
- December 31
The first scheduled dividend payment is expected on December 31, 2025, assuming the stock begins trading within the timeframe anticipated. Dividends will be payable only in cash, with payment contingent upon declaration by Strategy’s board of directors and the availability of legally permitted corporate funds.
If Strategy does not pay dividends when due, those dividends convert into compounded dividends, accruing interest at an initial rate of 10% plus 100 basis points. The compounded rate may increase by an additional 100 basis points per year for each missed period, up to a maximum dividend rate of 18% annually, ensuring investor compensation in the event of deferred payment.
If Strategy does not declare a regular dividend for a given dividend period, the company will issue a notice of deferral. Following such notice, Strategy is required, subject to restrictions, to use commercially reasonable efforts during the subsequent 60-day period to raise funds by issuing STRK Stock, STRD Stock, Class A common stock, or other junior securities. Those proceeds would be used to cover unpaid dividends and compounded accruals.
However, payment priority rules apply. Dividends on the STRE Stock may not be paid unless all accumulated and unpaid dividends on Strategy’s STRF Stock, STRC Stock, and any senior preferred equity have been paid in full.
Optional Redemption Rights
Strategy holds the right to redeem all—but not less than all—outstanding shares of STRE Stock under certain conditions, including:
- If the total outstanding shares fall below 25% of the total originally issued in this and any subsequent offering.
- If certain tax events occur that make the structure or maintenance of the security unfavorable.
The redemption price will equal the liquidation preference plus accrued and unpaid dividends through, but not including, the redemption date.
Fundamental Change Repurchase Rights for Investors
If a fundamental change occurs—defined within the certificate of designations governing the STRE Stock—holders will have the right to require Strategy to repurchase their shares for cash. The repurchase price would equal the stated €100 per share amount plus any accrued and unpaid regular dividends.
Liquidation Preference and Adjustment Mechanism
The STRE Stock initially carries a liquidation preference of €100 per share, meaning this is the baseline claim value in a liquidation scenario. Notably, the liquidation preference adjusts daily to the greatest of:
- The stated €100 amount per share;
- The last reported sale price per share on the preceding trading day (if any such trades occurred within the prior ten-day window); or
- The arithmetic average of the closing sale prices over the prior ten consecutive trading days (or shorter if newly issued).
This adjustment mechanism ties liquidation value to real-market pricing, potentially increasing holder protection during periods of trading volatility.
Underwriters and Offering Documentation
The offering will be managed by a group of joint book-running managers, including:
- Barclays Bank PLC
- Morgan Stanley & Co. International plc
- Moelis & Company LLC
- SG Americas Securities, LLC
- TD Securities (USA) LLC
- Canaccord Genuity Limited
- StoneX Financial Inc.
The offering will be conducted under an effective shelf registration statement already on record with the U.S. Securities and Exchange Commission (SEC). Sales will only be made through a prospectus supplement and accompanying prospectus, which are available on the SEC’s public website or directly from the underwriting banks.
Important Notices to Investors in the EEA and U.K.
The STRE Stock will not be offered to retail investors in the European Economic Area or the United Kingdom. The offering is restricted to qualified investors and professional clients, and no PRIIPs key information document has been prepared. Accordingly, offering the STRE Stock to retail clients in these jurisdictions may be unlawful.
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