Strategy company uses preferred stock to purchase $1.6 billion worth of Bitcoin

Investing.com – Strategy Inc. purchased nearly $1.6 billion worth of Bitcoin between March 9 and last week, according to regulatory filings submitted on Monday. This is the company’s largest purchase since January.

The company, formerly known as MicroStrategy, acquired 22,337 Bitcoins during this period. About $400 million of the purchase funds came from common stock sales, while the remaining $1.2 billion was raised through the market sale of its Stretch perpetual preferred stock.

Stretch securities are a dividend-paying instrument similar to perpetual bonds, promising investors an 11.5% annual return, backed by the Bitcoin held by the company.

Last week marked the largest Stretch sale by Strategy since the securities’ initial public offering in July of last year. It was also the first time in several weeks that the company primarily relied on Stretch to fund its purchases.

During this period, Strategy has been promoting these securities as a way for investors and companies to gain Bitcoin exposure without bearing the volatility of cryptocurrencies.

Strategy has developed a financing structure that includes debt, preferred stock, and equity, all used to purchase Bitcoin. Each instrument offers investors a different combination of risk and return.

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