Strive SATS Offering Would Add $75 Million in Annual Dividends

Strive’s proposed SATS preferred-stock offering would add $75 million in modeled annual dividends if all 5 million shares are sold at their $100 stated amount, putting the estimated annual dividend amount for SATS and SATA at about $257.4 million under stated assumptions.

The preliminary offering terms leave the price and net proceeds blank. Strive has not committed to raising $500 million or to a specific Bitcoin purchase. Proceeds could go toward Bitcoin and related products, income-generating assets, working capital, acquisitions or share repurchases.

SATS carries a 15% annual dividend rate on its $100 stated amount per share. Strive set the rate on existing SATA shares at 13% in April. Applying that rate to the 14,030,176 SATA shares listed as of Oct. 9 gives an estimated $182.4 million in annual dividends. Adding $75 million for a full SATS offering brings the modeled annual amount to about $257.4 million, assuming SATA remains at 13%.

Strive plans to add $22.50 per SATS share to its dividend reserve at closing. That would total $112.5 million if all 5 million shares are issued. Bitcoin does not generate interest or other returns, so dividend payments would need to come from reserves, asset sales or other income.

SATS is a perpetual preferred stock with no stated maturity date. Its dividends accumulate, but payment depends on board declaration and legally available funds. SATS would rank behind SATA and ahead of common equity.

Bitcoin’s price is volatile, and Strive could convert Bitcoin purchased with offering proceeds into cash worth substantially less than its cost. The company may also seek additional capital through later offerings.

Strive recently purchased 3,311 Bitcoin, bringing its holdings to 32,773 BTC as of Oct. 9. The offering’s final size, use of proceeds and resulting dividend amount depend on its final terms and the number of shares sold.