Strive (ASST), a NASDAQ-listed asset manager with one bitcoin Treasury Strategy, announced Plan Monday An initial public offering of a new class of preferred shares designed to pay dividends.
A series of variable rate Perpetual preferred stock, called SATA, seeks to pay an initial 12% annual dividend, paid monthly in cash. The company is set to offer 1.25 million SATA to investors, raising funds to acquire more BTC and expand its operations, while the proceeds can also go to income-generating assets, working capital or repurchasing common stock. The effort currently holds just under 6,000 BTC, which is worth about $637 million at current prices, an amount that will increase to about 11,000 coins if its all-stock merger with Semler Scientific (SMLR) should be completed.
An almost non-stop sell-off in its common stock since the completion of a spac deal a few weeks ago, has left Strive Trading at a discount to the value of bitcoin on its balance sheet (an MNAV of below 1). Thus, issuing common stock for continued bitcoin purchases is highly dilutive to existing shareholders.
The move to instead issue preferred stock follows in the footsteps of the pioneering approach of Bitcoin Treasury Firm, which began issuing Different classes of preferred shares To expand its options to raise capital for BTC purchases.
Again with a nod to Saylor and team. Strive said it plans to maintain SATA’s trading range between $95 and $105 per share by adjusting dividend rates within those limits. If the dividends are not paid, the rate compounds monthly, eventually reaching up to 20% annually, per press release.
Barclays and Cantor Fitzgerald will act as joint book runners for the offering, with Clear Street as co-manager. A $12 per share dividend reserve will be set aside to cover the first year of distributions.
ASST shares were down 2.3% on Monday along with a 4% slide in the price of Bitcoin to $106,000. SMLR decreased by 2.5%.
The offer comes as digital asset stocks have tumbled in recent months, with many now trading below the value of the underlying holdings, limiting their ability to raise fresh funds to continue their crypto purchases.
