Michael Saylor’s Strategy has publicized its intention to conduct an IPO of 3,500,000 shares of Strategy’s Series A Perpetual Stream Preferred Stock (STRE Stock). The STRE Stock will earn cumulative dividends at an annual rate of 10% of the €100 per share, payable only in cash, beginning December 31, 2025.
The Bitcoin treasury firm further clarified that the dividends will be paid out of funds available for shareholders’ quarterly arrears on March 31, June 30, September 30, and December 31 of each year, when and if declared by the company’s board or any authorized committee. The dividends will also increase at a rate of 100 basis points per annum for every subsequent regular dividend period, up to a maximum of 18% per annum.
Cryptopolitan previously reported that Strategy sold $2.1 billion in STRF preferred stock in May to buy more BTC and launched STRD through an IPO, offering a 10% perpetual dividend and 6x Bitcoin backing. The company also conducted another $500 million STRC IPO in July to fuel more BTC buying. The Stretch (STRC) preferred stock hit the market at $90.
Strategy retains the right to buy back all STRE Stock
The BTC treasury said it will retain the right, at its discretion, to redeem all, and not less than all, of the STRE Stock at any time. However, the STRE Stock will only be redeemed for cash if the number of then outstanding STRE Stock is less than 25% of the initially issued STRE shares. The company also emphasized that it has the right to redeem all STRE Stock under specific tax situations. Market factors on the day of the liquidation will also determine the redemption price.
However, buyers will be able to, subject to specific limitations, request the company to repurchase the STRE Stock in the event of certain fundamental changes, as specified in the Certificate of Designations governing the STRE Stock. The liquidation preference for the STRE Stock will initially be €100 per share, effective immediately after the close of each business day, or readjusted according to specified market conditions.
Canaccord Genuity Limited, Barclays Bank PLC, and Morgan Stanley & Co. International plc are the joint book-running managers for the STRE Stock offering. SG Americas Securities LLC, TD Securities (USA) LLC, StoneX Financial Inc., and Moelis & Company LLC are also part of the team.
Strategy prohibits EEA retail investors
The BTC treasury firm cautioned all retail investors in the EEA (European Economic Area) to stay away from the STRE IPO and any subsequent dealings, within the meaning of Article 2(e) of Regulation (EU) 2017/1129. Similarly, no prospectus or any offering in connection with the STRE Stock will be prepared for investors in the EEA.
Retail investors in the UK were also prohibited from interacting with the STRE Stock in any form or manner. Any person with professional investment experience within Article 19(5) of the Financial Services and Markets Act 200, Order 2005, as amended, is categorized as a retail investor.
Other prohibited persons in the UK include retail clients as defined in point (8) of Article 2 of Regulation (EU) No 2017/565. Customers within the meaning of the FSMA provisions, including where a customer does not qualify as a professional client, will also be prohibited from any dealings concerning the STRE Stock. Strategy claims that dealing with UK investors will be illegal under the UK PRIIPs Regulation.
However, the company emphasized that the target market for the STRE Stock is limited to those eligible as defined in the FCA Handbook Conduct of Business Sourcebook (COBS) and professional clients as defined in Regulation (EU) No 600/2014. Meanwhile, any UK distributor subject to COBS is responsible for carrying out its target market assessment.
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