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Strive funds 469 bitcoin with preferred stock costing $11,170 per coin a year
Strive paid for last week's 469 bitcoin entirely with preferred stock. The coupon on its $1.04 billion of SATA is 13%, charged every business day, against a treasury of 25,000 coins. Warrants struck at $27 expire in mid-October.
The Investor · Invest desk
What happened
- Strive bought 469 bitcoin between September 8 and September 11 at an average of $77,954, spending roughly $36.6 million, according to a Form 8-K filed with the SEC on September 14.
- The purchase lifted the treasury from 24,531 coins at the start of the month to 25,000.
- Preferred shares outstanding rose by 402,541 to 10,397,966, about $40.3 million at the $100 stated amount, taking SATA notional to roughly $1.04 billion from $999.5 million a week earlier.
- Class A shares rose by just 34,206 to 85,730,853 and Class B held flat at 9,237,911.
- The instrument that funded the week is SATA, a floating-rate perpetual preferred paying a 13% annualized dividend every business day.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- cost The tranche that bought these 469 coins carries about $11,170 of dividend per bitcoin a year, or 14.3% of what Strive paid for them, so the coins have to appreciate faster than that to cover their own financing.
- constraint Buying capacity is set by where SATA trades rather than by bitcoin: below the $100 par the at-the-market issuance pauses, while the dividend keeps being charged daily.
- exposure At about $41,600 a bitcoin the preferred notional equals the whole 25,000-coin treasury, and the ratio Cole quoted at 53.5% would be 100%.
- decision Exercise of the $27 warrants would put roughly 25.9 million new common shares into the count, about 30% on top of Class A, moving the next $700 million of funding onto the common after a week that used none of it.
The raise came in bigger than the bill. Strive issued about $40.3 million of preferred to pay for $36.6 million of bitcoin [7][1], roughly $3.7 million more than the coins cost [1], and cash still went up, from $202.6 million to $204.2 million [10]. A week earlier the common had moved: Class A rose by more than 2.2 million shares [9].
Matt Cole gave the split himself. "100% of the capital raised came from SATA, which now has over $1B notional outstanding," Strive's chief executive wrote on X, and said the company "increased amplification ratio to 53.5%" [4][5]. Divide the preferred by the coins and you land in the same place: 25,000 bitcoin at the $77,954 average purchase price is about $1.95 billion [4][1], and $1.04 billion of SATA over that is 53.4% [5].
The issuance has a price condition attached to it. Cryptopolitan reports that Strive sells SATA through an at-the-market program when the preferred trades near or above its $100 par, and that issuance tends to pause when it slips below [12]. The weekly buying has been getting smaller: 1,800 coins in late August, then 1,375, then 469 [18], down about 74% across the three weeks [9].
Paying the coupon does not require selling bitcoin yet. The $204.2 million of cash covers about 18 months of the roughly $135 million annual dividend [13][7], and if warrant holders exercise at $27 before mid-October, BitcoinTreasuries.net's estimate of more than $700 million in proceeds would be about five years of it [20][10]. Cryptopolitan notes that a sustained fall in bitcoin would compress the treasury while the preferred obligations stay fixed [15].
In my view the all-preferred week is a financing choice made at a price, and 13% is the price while SATA holds par: Cole's model pairs long-duration bitcoin with long-duration preferred equity instead of debt or steady common dilution [19], and the dividend is charged daily whatever bitcoin does [3]. The counter-thesis is that the coupon is refinanceable out of fresh preferred indefinitely, in which case the 13% is a spread against bitcoin's return and never reaches the coins. The first week SATA prints below $100 and the purchases stop is the test between the two. Cole said earlier this month that it was "not out of the realm of possibility" for Strive to become the second-largest publicly traded corporate bitcoin holder by year-end, though he said that was not his base case [21]; it is fifth now, behind Strategy's 845,050 coins [17].
What to watch
- Whether warrant holders exercise at $27 before the mid-October expiry, and where those proceeds go.
- Whether the amplification ratio Cole put at 53.5% keeps climbing on the next weekly 8-K.
- The 505,000 STRC preferred shares Strive holds in Strategy, unchanged this week, and whether they get sold to fund dividends.