Strive Uses Perpetual Preferred Equity to Restructure Debt, Offering Potential Model for Strategy

Strive (ASST), a bitcoin treasury and asset management company, is reshaping its balance sheet by using perpetual preferred equity to retire convertible debt, a strategy that could eventually serve as a blueprint for Strategy (MSTR). The move highlights a growing trend among bitcoin-focused companies seeking to improve leverage metrics while maintaining flexibility in capital structure.

On Thursday, Strive priced a follow-on offering of its Variable Rate Series A Perpetual Preferred Stock, known as SATA, at $90 per share. The offering was upsized beyond the originally announced $150 million, allowing for the issuance of up to 2.25 million SATA shares in total. This aggregate includes both public issuance and privately negotiated exchanges with existing debt holders, underscoring strong demand for the instrument.

The company said it plans to use the net proceeds primarily to pay down Semler Scientific’s 4.25% Convertible Senior Notes due in 2030, which are guaranteed by Strive. It expects to enter exchange agreements with certain noteholders representing approximately $90 million in principal. Under those agreements, roughly 930,000 newly issued SATA shares will be exchanged directly for the convertible notes, effectively removing a portion of fixed-maturity debt from the balance sheet.

Any remaining proceeds, along with existing cash and potential funds from terminating capped call transactions, are expected to be used to redeem or repurchase the rest of the Semler convertibles, repay borrowings under Semler Scientific’s Coinbase Credit facility, and fund additional bitcoin purchases. Rather than refinancing dated debt, Strive is converting these obligations into perpetual preferred equity, which carries no maturity and no conversion feature.

SATA currently pays a variable dividend set at 12.25% and is treated as equity rather than debt, improving reported leverage and enhancing financial flexibility. Bondholders, meanwhile, exchange equity conversion optionality for a higher-yielding, perpetual, and fully liquid security that sits senior to common stock.

This approach could be relevant for Strategy, which has about $8.3 billion in outstanding convertible notes. Its largest tranche, $3 billion with a June 2028 put date and a $672.40 conversion price, remains well above the current share price. Using perpetual preferred equity to retire or exchange such debt could offer executive chairman Michael Saylor another way to reduce long-term maturity risk while supporting Strategy’s bitcoin-focused capital strategy.