Strategy Bolsters Bitcoin Treasury with $2.1 Billion Preferred Stock Offering

Strategy, formerly known as MicroStrategy, has announced a $2.1 billion at-the-market (ATM) offering of its 10% Series A Perpetual Strife Preferred Stock (STRF) launched on May 22, 2025, to further bolster its Bitcoin treasury. This move underscores Strategy’s ongoing commitment to accumulating Bitcoin, positioning itself as the largest corporate holder of the cryptocurrency with over 576,230 BTC, valued at approximately $63.79 billion as of May 23, 2025.

Details of the STRF ATM Offering

The STRF offering, facilitated by underwriters TD Securities, Barclays Capital, and Benchmark, allows Strategy to sell shares incrementally at market prices on Nasdaq, where STRF closed at $99.40 per share on May 22, 2025. The proceeds will primarily fund Bitcoin purchases, with additional allocations for general corporate purposes, such as operational expenses. The shares carry a 10% annual dividend, enhancing their appeal to income-focused investors.

This follows Strategy’s recent acquisition of 7,390 BTC between May 12 and May 18, 2025, at an average price of $103,498 per Bitcoin, totaling $764.9 million.

The company’s Bitcoin holdings, acquired at an average price of $69,726 per BTC, have delivered a 16.3% return year-to-date, with Bitcoin trading at approximately $110,746 as of the press time on May 23, 2025.

Strategy’s Bitcoin Treasury Strategy

Under the leadership of Executive Chairman Michael Saylor, Strategy has pioneered a financial model that leverages debt and equity offerings to amass Bitcoin. The company has raised funds through STRK and STRF preferred stocks, convertible notes, and ATM sales of its Class A common stock (MSTR), often supplemented by call options. Rather than focusing on principal repayment, Strategy prioritizes interest payments to sustain its financing, betting on Bitcoin’s long-term appreciation.

The STRF offering aligns with Strategy’s “42/42” plan, an $84 billion capital raise through 2027 to expand its Bitcoin treasury, building on the earlier $42 billion “21/21” plan. Analysts at Bernstein praise Strategy’s scale, noting its ownership of over 2.5% of Bitcoin’s total supply.

Strategy’s approach has inspired over 85 corporations, including Twenty One and Metaplanet, to adopt Bitcoin treasury strategies. However, its dominance remains unmatched, with holdings far exceeding those of competitors.

Risk Concerns and Legal Challenges

Strategy’s financing approach has provided substantial capital for Bitcoin acquisitions but has also drawn scrutiny.

For investors, Strategy’s Bitcoin acquisition strategy presents two key risks: Bitcoin’s inherent price volatility and the company’s reliance on high-leverage financing. Crypto researcher @0xjaypeg, argues that Strategy’s leverage is relatively limited, with low-cost debt mitigating concerns about excessive borrowing, suggesting the strategy is sustainable.

However, investors remain concerned about Bitcoin’s price fluctuations. On May 16, 2025, Strategy disclosed a class-action lawsuit filed in the U.S. District Court for the Eastern District of Virginia, alleging that the company downplayed Bitcoin’s volatility risks while overstating the profitability of its investments.

DeFiLlama developer @0xngmi supported Strategy on X, stating, “The lawsuit seems to be people complaining that MicroStrategy understated how much money it could lose if BTC went down. But if you’re buying a company that is self-labeled as ‘leverage on Bitcoin,’ what do you expect? It’s pretty clear what will happen if BTC goes down.”

Market Context and Outlook

The STRF offering coincides with a vibrant crypto market, with Bitcoin recently hitting a new high, surpassing $110,000. Meanwhile, a growing number of institutions are actively incorporating Bitcoin into their investment portfolios, amplifying Strategy’s potential returns as Bitcoin’s price rises. However, challenges persist. Without a clear principal repayment plan for its debt instruments, a stagnant Bitcoin price could raise concerns about Strategy’s long-term sustainability. As Strategy expands its Bitcoin treasury, its approach will continue to shape discussions around corporate cryptocurrency strategies.