Strive SATS preferred offering raises $630 million for bitcoin

The Strive SATS preferred offering gives the bitcoin treasury company a large new source of funding that does not dilute common shareholders directly. Strive priced 7 million shares of its 15.00% Series A Perpetual SATS Preferred Stock at $90 each on Thursday, an upsize of 2 million shares, for gross proceeds of about $630 million. The deal is scheduled to settle on Oct. 20.

What happened

According to Strive's pricing announcement, SATS shares accumulate cumulative dividends at 15% a year on a $100 stated amount. Regular dividends are scheduled to be paid on each business day, starting on Nov. 9, if declared by the board. At closing, Strive plans to add $22.50 per SATS share to its dividend reserve, enough to cover the first 18 months of payments.

Proceeds are earmarked for general corporate purposes, including buying bitcoin and bitcoin-related products, working capital, income-generating assets and possible repurchases of its Class A common stock or its SATA preferred. Barclays and Cantor are joint bookrunners.

On Friday, TD Cowen analysts Lance Vitanza and Jonnathan Navarrete raised their price target on Strive's Class A shares to $56 from $44, The Block reported. Strive's holdings climbed to 35,595 BTC, worth roughly $2.9 billion, from 28,000 at the end of September, an increase of almost 7,600 coins against the firm's prior forecast of 4,750 for the entire quarter.

Why it matters

Those purchases, including 3,311 BTC announced on Tuesday and 2,822 BTC on Wednesday, gave Strive the fourth-largest bitcoin treasury among listed companies, just ahead of MARA, according to The Block. Speed has come at a cost: the analysts said a jump in diluted shares tied to warrant exercises had pressured the company's "BTC Yield" metric.

The Strive SATS preferred offering is designed to break that link. TD Cowen expects the proceeds to fund more buying without adding common shares, and the analysts said selling pressure from warrant holders should ease now that no $27 warrants remain. The shares still fell 6.6% to $23.96 on Friday, though they are up more than 38% this year.

High-coupon preferreds have become the treasury sector's favored funding tool, following Strategy's STRC-funded purchases. The model faces a new test after MSCI's non-operating rule put holding-company treasuries at risk of index exclusion.

What's next

Settlement on Oct. 20 is the first milestone, followed by the first daily dividend in November. Barclays and Cantor are joint book-runners, with Clear Street as lead manager, and Strive keeps the option to redeem the whole series for cash once fewer than 25% of the shares ever issued remain outstanding. A 15% coupon is a heavy fixed cost if bitcoin stays near $81,000, so investors will watch how much of the cash goes to coins versus the reserve.

Strive's next holdings update will show how quickly the Strive SATS preferred offering is turned into bitcoin, and whether it can keep pace with MARA and other large holders.