Strategy issues new euro-denominated preferred shares to buy Bitcoin
Cryptocurrency treasury (DAT) firm Strategy has announced the issuance of new euro-denominated perpetual preferred shares to fund its next Bitcoin (BTC) purchases.
On October 7, the company announced that its Series A Perpetual Stream Preferred Stock, under the ticker symbol STRE, would be offered at a price of €80 ($92.50) per share. Strategy expects to receive net proceeds of approximately €608.8 million ($704.5 million).
The funds are expected to be used to increase Bitcoin reserves and for general corporate purposes. The IPO is expected on November 13.
Strategy clarified that the STRE issue will not be available to retail investors in the European Union and the UK.
The latest funding round comes after the company slowed its digital gold purchases in October due to a general decline in activity in the DAT company sector and a weaker market.
On the topic: Bitcoin confidently moves towards $1 million – Michael Saylor
Strategy struggles as industry declines
Strategy's third-quarter revenue was $2.8 billion, down from $10 billion in the second quarter. The company's shares have been in a downward trend since July.
In October, S&P Global Ratings assigned Strategy a B- rating, a “non-investment grade” rating with elevated speculative risks.
Strategy shares are falling along with other DAT companies. Source: TradingView.
For comparison, S&P's highest rating is AAA, which is 15 notches higher than B-. All ratings below BB are considered non-investment grade.
S&P noted that the high concentration of Bitcoin assets increases risks for investors, and the company's business model is too focused on the first cryptocurrency without sufficient diversification of revenue sources.
Why Strategy Is Unlikely to Sell Its Bitcoin
Bitcoin analyst and investor Willy Woo believes Strategy is unlikely to sell off its holdings even during the next bear cycle.
According to him, the company's debt repayment terms are distributed evenly and are manageable, so the likelihood of forced liquidation of assets to meet debt obligations is low.
Related: Crypto Treasury Firms' Challenges Open Up Opportunities — 10x Research
Source: cryptonews.net
