15% discount and 17% yield boost made Strategy STRF sale ‘upsized’
Michael Saylor boasted this morning that his company upsized a fundraising deal from $500 million to $722.5 million. In order to close that deal, however, he boosted the STRF preferred stock dividend and financial terms — and excluded those details from his tweet. Specifically, Strategy (formerly MicroStrategy) had hoped to sell 5 million shares of STRF preferred stock as close to their $100 liquidation preference as possible. Instead, the company slashed the pricing of those shares by 15% to $85. Liquidation preference is the right of certain investors to receive their investment back first — ahead of common shareholders — in the event of a liquidity event like a dividend, dissolution, or payout. In addition to a 15% discount on liquidation preference, Strategy agreed to keep its dividend rate at 10% on the full $100 per share. Therefore, an even sweeter result of that discount is that investors will receive a de facto 11.76% dividend rate because of th...