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Strive (ASST), a Nasdaq-listed asset manager with a bitcoin treasury strategy, announced plans Monday for an initial public offering of a new class of preferred stock designed to pay dividends.
Series A Variable Rate Perpetual Preferred Stock, called SATA, aims to pay an initial annual dividend of 12%, paid monthly in cash. The company will offer 1.25 million SATA to investors, raising funds to acquire more BTC and expand its operations, while the profits can also go to income-generating assets, working capital or repurchase of common shares. Strive currently holds just under 6,000 BTC, valued at around $637 million at current prices, an amount that will increase to around 11,000 coins if it completes its all-stock merger with Semler Scientific (SMLR).
An almost relentless sell-off in its common stock since the end of a SPAC agreement several weeks ago, has left Strive trading at a discount to the value of bitcoin on its balance sheet (a mNAV of below 1). Thus, the issuance of common stock for ongoing bitcoin purchases would be highly dilutive to existing shareholders.
The move to issue preferred shares instead follows in the footsteps of pioneering bitcoin treasury company Strategy, which has begun issuing them. different classes of preferred stock to expand their options to raise capital by purchasing BTC.
Again a nod to Saylor and the team. Strive said it plans to maintain SATA’s trading range between $95 and $105 per share by adjusting dividend rates within established limits. If the dividends are not paid, the monthly compound rate, eventually reaching 20% ​​per year, for the press release.
Barclays and Cantor Fitzgerald will act as bookrunners for the offering, with Clear Street as co-manager. A dividend reserve of $12 per share will be set aside to cover the first year of distribution.
ASST shares are lower by 2.3% on Monday alongside a 4% slide in the price of bitcoin to $106,000. SMLR is down 2.5%.
The offer comes as the digital asset’s treasury stock has tumbled over the past months, many now trading below the value of the underlying shares, limiting its ability to raise fresh funds to continue its crypto purchases.
