Strive Shares Drop After Sales Agreement for $1B Preferred Stock

What happened

Strive said it entered a sales agreement to possibly issue and sell up to $1 billion of its 15.00% Series A perpetual SATS preferred stock. Its stock fell 6% to $27.40 on Monday, though it is up 25% over the past 12 months.

Confirmed

Global impact / market context

Strive plans to use the money for general corporate purposes, including buying bitcoin and bitcoin-related products, plus working capital. Selling up to $1 billion of preferred stock could raise cash for those purchases, but it may also dilute or change the claims existing shareholders hold.

Analyst inference

The at-the-market offering, which means shares can be sold gradually through sales agents, could add supply over time. The 15.00% preferred dividend is a fixed payout that raises the cost of this borrowed-like money for Strive.

Analyst inference

What to watch

1. The sales agreement allows Strive to issue and sell up to $1 billion of its 15.00% Series A perpetual SATS preferred stock through sales agents in at-the-market offerings. Confirmed
2. Strive intends to use proceeds for general corporate purposes, including acquiring bitcoin and bitcoin-related products, and for working capital, according to the company's stated plan. Proposed
3. Watch how much of the $1 billion is actually sold and how fast, because gradual sales could add share supply, while bitcoin purchases could change the company's asset mix and risk. Analyst inference

Affected assets

• BTC — Bitcoin

Evidence

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