Key Takeaways
What’s Behind the Euro-Focused Preferred Stocks?
To raise more money for BTC purchases.
How have BTC and MSTR performed against the broader stock market?
The Nasdaq Composite outperformed MSTR and BTC.
Michael Saylor’s Strategy (formerly MicroStrategy) is looking for more money in European markets to further its strategy Bitcoin [BTC] plans.
In a statement on November 3, BTC’s corporate treasury pioneer said announced a plan to raise €350 million (approximately $378 million) through a new euro-denominated preferred stock called Stream [STRE].
The company will now have five shares as part of its capital raising war chest. They include common stock, MSTR and other preferred stock, such as Strife [STRF]Strike [STRK]Step [STRD]and Reken [STRC].
These are dividend rate stocks, and some are convertible to MSTR, allowing Strategy to sell them to fund BTC purchases.
Strategy’s holdings reached 641.2K BTC
The company added 397 BTC (approximately $45.6 million) on November 4, bringing its total supply to 641,205 BTC.
Most of the money for the recent offering was generated from the sale of shares of MSTR, STRF and STRK, according to an SEC. submit.
Overall, however, the pace of BTC purchasing has cooled. Apart from a mega purchase of 21,000 BTC ($2.4 billion) in July, the rest have fallen below 500 BTC.
Source: CryptoQuant
Strategy started its BTC bet in 2020 with an initial purchase of 21.4K BTC, worth $250 million at the time. The company now owns approximately $66 billion worth of BTC, with an unrealized gain of approximately $19 billion after the recent market decline.
In particular, its capital raising strategy has come under pressure recently as the market-to-net asset value (mNAV) of its investments is at risk of falling below 1.
If that happens, the company will no longer be allowed to sell MSTR shares to fund additional Bitcoin purchases.
Source: Bitcoin Treasuries
According to analystsexpanding into the Eurozone with preferred shares could give the company the breathing space it needs to buy more BTC, especially during discount periods like the current one.
Meanwhile, MSTR stock fell 3.5% to $264 at the time of writing, following BTC’s extended decline below $105,000.
On a YTD (year-to-date) basis, the MSTR was down 8% while BTC rose 11%. In contrast, Nasdaq Composite rose 23%, underscoring that stocks have outperformed BTC and its equivalent exposures.