Strive prices $630 million 15% preferred offering, bitcoin holdings reach 35,595 BTC

Strive (Nasdaq: ASST), a U.S.-listed company, priced an offering of 7 million shares of its 15.00% Series A Perpetual SATS Preferred Stock at $90 per share. The company announced the pricing on Oct. 15 (U.S. time) and filed a current report (Form 8-K) with the Securities and Exchange Commission on Oct. 16. Gross proceeds are expected to be about $630 million before deducting fees and expenses, and settlement is scheduled for Oct. 20.

Strive said it intends to use the net proceeds for general corporate purposes, including the acquisition of bitcoin and bitcoin-related products, working capital, the purchase of income-generating assets, and repurchases of its Class A common stock or its existing SATA preferred stock. Barclays and Cantor Fitzgerald are acting as joint book-running managers, with Clear Street as lead manager and four firms including B. Riley Securities as co-managers. Strive describes itself as a structured finance company that has adopted bitcoin as its hurdle rate for capital deployment. Its subsidiary Strive Asset Management, an SEC-registered investment adviser, manages over $2.8 billion in assets.

A 5 million-share plan became 7 million in two days

When the company first announced the offering on Oct. 13, it planned to sell 5 million shares. The pricing announcement on Oct. 15 added 2 million shares, bringing the total to 7 million. SATS dividends accumulate at 15% a year on a stated amount of $100 per share, set by the company. That works out to $15 a year for each share. The $90 offering price is $10 below the stated amount.

The liquidation preference, the amount holders are paid first if the company is wound up, starts at $100 per share. After that, it resets each business day to the greatest of $100, the prior trading day's last reported sale price if the company sold additional SATS that day or within the preceding 10 trading days, and the average of the last reported sale prices over the past 10 trading days. If outstanding SATS falls below 25% of all shares issued, the company can redeem all of it for cash, and if a fundamental change such as a change of control occurs, holders can require the company to repurchase their shares.

Dividends every business day, with 18 months' worth reserved

Dividends will be paid each business day when declared by the board, starting Nov. 9. The first dividend will include everything accrued since the closing date. Strive said that at closing it will deposit $22.50 per share, equal to the first 18 months of dividends, into its dividend reserve. The reserve will be funded with a combination of existing cash on hand and securities held by the company.

The company also changed the terms of its existing SATA preferred stock. Strive disclosed on Oct. 13 that it amended SATA's governing documents to set a minimum sale price of $100 per share, before discounts and commissions, for all future sales. The change turns a previously announced company policy into a binding provision. SATA is a variable rate perpetual preferred stock, and its outstanding shares rose by more than 1.8 million in two weeks, from 12,193,180 on Sept. 25 to 14,030,176 on Oct. 9.

8,133 bitcoin in just over two weeks

Recent filings show Strive buying bitcoin every week. According to the filings, it bought 1,107 BTC from Sept. 21 to 25, lifting its holdings to 27,462 BTC, then added 2,000 BTC from Sept. 28 to Oct. 2 at an average of about $84,422 and 3,311 BTC from Oct. 5 to 9 at an average of about $84,500. Holdings stood at 32,773 BTC as of Oct. 9.

Strive then disclosed on Oct. 14 that it bought 2,822 BTC on Oct. 12 and 13 at an average price of about $83,266, inclusive of fees and expenses. That is worth roughly $235 million. The Oct. 14 filing did not state total holdings, but adding the purchase to the Oct. 9 figure gives 35,595 BTC. That is 8,133 BTC more than on Sept. 25. On Oct. 12 and 13, more than 273.49 million traditional warrants (rights to buy shares at a set price) were exercised for 13,674,703 new Class A shares, and the company expects gross proceeds of about $369.2 million. No traditional warrants issued in connection with the company's PIPE (private placement) transaction remained outstanding as of the close of business on Oct. 13.

As of Oct. 9, Strive also held $310.3 million in cash and cash equivalents and 505,000 shares of Strategy's STRC preferred stock. Strive shares and SATS are U.S. market products and do not trade on Korean won exchanges. Bitcoin traded at 110,459,000 won on Upbit and $81,704 on Binance around 5:30 p.m. KST on Oct. 18, with the kimchi premium (the gap between prices on Korean exchanges and global markets) at around 1.3%.