Strategy™ Announces Pricing of $85 Per Share IPO for STRD Stock, Raising Approximately $979.7 Million
On June 5, 2025, Strategy™ (Nasdaq: MSTR/STRK/STRF) announced the pricing of its highly anticipated initial public offering (IPO) of 11,764,700 shares of its 10.00% Series A Perpetual Stride Preferred Stock, known as “STRD Stock.” The shares were priced at $85.00 per share, with the issuance and sale scheduled to settle on June 10, 2025, subject to customary closing conditions. This marks a significant milestone for Strategy™ as it seeks to expand its financial capabilities and further its strategic objectives.
Financial Highlights and Use of Proceeds
Strategy™ estimates that the net proceeds from the offering will amount to approximately $979.7 million after deducting underwriting discounts, commissions, and estimated offering expenses. The company plans to allocate these funds toward general corporate purposes, including the acquisition of bitcoin and bolstering working capital. This dual-purpose approach underscores Strategy™’s commitment to leveraging innovative technologies and digital assets while maintaining robust operational liquidity.
Dividend Structure and Payment Terms
One of the defining features of the STRD Stock is its non-cumulative dividend structure. Holders of the STRD Stock are entitled to receive dividends at an annual rate of 10.00% on the stated amount of the shares, provided that such dividends are declared by the company’s board of directors or an authorized committee. Importantly, these dividends are not mandatory, meaning Strategy™ retains flexibility in determining whether to declare them based on its financial performance and strategic priorities.
If declared, dividends will be paid quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, beginning on September 30, 2025. Since the dividends are non-cumulative, any undeclared dividends will not accrue or accumulate, ensuring clarity and predictability for investors. All declared dividends will be payable solely in cash, subject to the terms outlined in the prospectus supplement.
Redemption Rights and Liquidation Preference
Strategy™ has also structured the STRD Stock with provisions allowing the company to redeem all outstanding shares under specific circumstances. For instance, if the total number of STRD Stock shares outstanding falls below 25% of the original issuance, Strategy™ may elect to redeem all remaining shares for cash. Additionally, certain tax-related events could trigger a similar redemption process. In both cases, the redemption price would equal the liquidation preference of the STRD Stock, plus any declared but unpaid dividends accrued up to the redemption date.
The liquidation preference for the STRD Stock is initially set at $100 per share, referred to as the “stated amount.” However, this figure is subject to adjustment based on market dynamics. Specifically, the liquidation preference will be recalculated daily to reflect the highest value among three metrics: the stated amount, the last reported sale price of the STRD Stock, or the average of the last reported sale prices over the preceding ten trading days. This mechanism ensures that the liquidation preference remains aligned with market conditions, providing transparency and fairness to investors.
Fundamental Change Provisions
In the event of a “fundamental change” as defined in the certificate of designations governing the STRD Stock, shareholders will have the right to require Strategy™ to repurchase their shares. The repurchase price will equal the stated amount of the STRD Stock, plus any declared but unpaid dividends accrued up to the repurchase date. This provision offers additional protection for investors, ensuring they have recourse in scenarios where the company undergoes significant structural changes.
Underwriting and Distribution
The offering is being led by Barclays, Morgan Stanley, Moelis & Company, and TD Securities as joint book-running managers. Supporting them are co-managers including The Benchmark Company, Clear Street, AmeriVet Securities, Bancroft Capital, Keefe, Bruyette & Woods, and BTIG. These firms bring extensive expertise in navigating complex capital markets transactions, underscoring the credibility and professionalism of the offering.
The offering is being conducted pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (SEC). Interested parties can access the preliminary prospectus supplement and accompanying prospectus electronically via the SEC’s website at www.sec.gov. Alternatively, copies can be obtained directly from the underwriters by contacting the respective representatives listed in the announcement.
Legal Disclaimer
It is important to note that this press release does not constitute an offer to sell or a solicitation of an offer to buy any securities mentioned herein. No sales will occur in any state or jurisdiction where such activities would violate applicable securities laws prior to registration or qualification. Investors are encouraged to review the full prospectus materials and consult with their financial advisors before making investment decisions.
