Strategy Pauses Bitcoin Buying Amid Record $4.2B Fundraise

Strategy, formerly MicroStrategy, intensifies its bet on bitcoin with a record $4.2 billion raise via 10 % perpetual preferred STRD shares. Under the leadership of Michael Saylor, the firm strengthens its accumulation strategy despite a noted pause in its BTC purchases. This tactical shift, balancing liquidity seeking and financial optimization, marks a new phase in the controversial alliance between traditional markets and cryptos.

A Strategic $4.2 Billion Raise via the STRD Program

While Michael Saylor sees bitcoin (BTC) at $3 million thanks to a clever financial model, Strategy announced this Monday a $4.2 billion issuance through its new perpetual preferred stock program: STRD (Series A Perpetual Stride Preferred Stock).

This is an “At The Market” (ATM) offering, that is a progressive sale of securities on the market based on prices and liquidity available at the time of each transaction.

“The strategy plans to sell the Stride preferred shares gradually and strategically, taking into account market price and trading volume at each sale”, the company indicated in its official statement.

This raise fits into an overall framework of diversifying the financing instruments used by Strategy. The main features of this STRD issuance are as follows :

• Total targeted amount : up to $4.2 billion raised via the ATM program ;

• Type of security : perpetual preferred STRD shares, with a fixed annual yield of 10 % ;

• Sales method : according to market demand, via conventional or block trades ;

• Planned use of funds : bitcoin acquisition, company general needs, dividend payments on other outstanding preferred shares, notably STRK (Strike) and STRF (Strife), and strengthening working capital.

This approach allows Strategy to maintain flexibility in managing its raises by adjusting volumes according to market conditions. This STRD raise complements already ongoing programs, notably MSTR common stock sales and other series of preferred shares.

It enables the firm to sustainably feed its ambition to remain the largest institutional bitcoin holder.

A Pause in BTC Purchases

In a separate statement also released this Monday, the firm of Michael Saylor confirmed having suspended its bitcoin purchases between June 30 and July 6, a pause that breaks the sustained pace observed over the last three months.

According to information published in an 8-K form filed with the SEC, this is the first interruption since the period from March 31 to April 6, just before the release of first-quarter results.

This pause is significant, as the company still holds 597,325 bitcoins, equivalent to over $65 billion at current prices. The average acquisition cost of this reserve is $70,982 per bitcoin, for a total invested amount of approximately $42.4 billion, including fees.

Meanwhile, Strategy published its financial results for the second quarter. It reports an unrealized gain of $14.05 billion on its cryptos, however offset by a deferred tax expense of $4.04 billion.

During the quarter ended June 30, the firm raised a net total of $6.8 billion through sales of its MSTR common shares and STRK and STRF preferred shares. The STRD program thus takes over from a financing mechanism that has proven its ability to generate large-scale capital.

These various programs are part of the “42/42 Plan”, a project aiming to raise $84 billion by 2027, double the initially named “21/21” plan.

The suspension of bitcoin purchases can be interpreted in several ways. On one hand, it might signal a desire to pause before a new accumulation cycle, awaiting better market conditions or finalizing new raises. On the other hand, this decision coincides with mixed financial publications and may indicate prudent cash flow management. In any case, the STRD program launch shows that Strategy remains committed to its long-term bitcoin-centered strategy, as evidenced by the 10,100 bitcoins bought cash during the Middle East crisis , while adapting its financing tools to the current economic and regulatory context.