Strive's $90 SATS Price Implies 16.7% Yield on Annual Dividend

Strive closed a $630 million preferred-share sale at $90 per share, giving buyers an implied 16.7% annual yield if dividends are paid and highlighting the cost of financing Bitcoin (BTC) treasuries.

The company sold 7 million SATS shares, up from a planned 5 million, at a discount to their $100 stated amount. Each share carries a 15% annual dividend based on that stated amount, or $15 a year. Dividing $15 by the $90 offering price produces the 16.7% figure if the dividend is paid in full.

A one-year Treasury yielded 4.51% at par on Oct. 20. That puts the arithmetic difference between the Treasury yield and SATS’s implied yield at about 12.2 percentage points. Strive closed the offering the same day, raising $630 million in gross proceeds.

Bitcoin purchases are among the possible uses for the proceeds, but Strive has not set an allocation for them. The offering discount raises the implied yield for a buyer paying $90 above the 15% dividend rate calculated on the $100 stated amount. At the $90 public offering price, each share carries a potential $15 annual dividend; Strive receives $87 per share from the underwriters before other offering expenses.

Strategy Inc. used common stock to raise money for its latest Bitcoin purchase. During the week ended Oct. 18, it sold 140,872 Class A shares for $22 million in net proceeds. It added $0.1 million of existing dollar cash to buy 267 BTC for $22.1 million, bringing its holdings to 848,517 BTC.

Strategy sold no preferred shares through its at-the-market programs that week. It also repurchased 1,938,780 STRC preferred shares for $193.1 million. The common-share sale funded most of the Bitcoin purchase, while the preferred-share transaction used cash to reduce the amount of STRC outstanding.

Over the first half of the year, Strategy sold about 58.5 million Class A shares through its at-the-market programs, generating $8.24 billion in net proceeds. Some proceeds funded its dollar reserve, preferred dividends and note interest. The remaining proceeds were used primarily to acquire Bitcoin.

Strategy’s “Assumed Diluted Shares Outstanding” stood at about 401.3 million as of June 30, up 56.4 million during the first half. A convertible-note repurchase reduced the share equivalent by about 2.2 million. The diluted-share measure should not be read as the number of common shares Strategy issued.

Strive’s regular SATS dividend dates are scheduled to begin Nov. 9, subject to board declaration.