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Bought 6,182 Bitcoin in One Week: A Bitcoin Treasury Company Has Taken on Twice Strategy’s Leverage 🦖
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On October 26, Strive disclosed that it bought 6,182 Bitcoin between October 17 and 23, bringing its holdings to 43,000. In the same week, Strategy bought none—and spent $204.9 million buying back its own preferred stock.
The contrast isn’t in how much they bought. It’s in how they financed it.
Strive just completed a $630 million offering of SATS perpetual preferred stock, selling 7 million shares at $90 each. It then set up an at-the-market offering program of up to $1 billion. Using the same Bitcoin price of $80,000 for both companies, Strive’s preferred stock has a face value of $2.103 billion, or 61.1% of the $3.44 billion value of its Bitcoin holdings. Strategy’s convertible debt and preferred stock total $20.061 billion, or 29.6% of the $67.881 billion value of its holdings. At the same Bitcoin price, Strive’s preferred capital as a share of its Bitcoin holdings is more than twice Strategy’s.
The cost is written into the dividends. SATS pays a fixed annual dividend of 15%, based on a face value of $100 per share. The first tranche alone will cost $105 million a year—16.7% of the $630 million raised. The two classes of preferred stock together will cost about $287 million a year, equal to 8.4% of the value of its Bitcoin holdings. Strategy’s annual dividends and interest total $1.509 billion, just 2.2% of its holdings’ value.
The company has $504.4 million in cash on its books, and has already set aside $157.5 million as a dividend reserve for the first 18 months. The prospectus is blunt: future dividends will be funded mainly through new financing, including the $1 billion ATM program. Put another way, it’s using new money to pay old dividends. If the financing window closes, the whole chain tightens immediately ⚠️
The reason it can do this is that the amount of Bitcoin represented by each share is genuinely increasing. From October 16 to 23, fully diluted Bitcoin per share rose from 29,039 sats to 33,066 sats—a 13.9% increase in one week. Management’s goal is also clear: as long as Bitcoin is below $100,000, keep preferred stock and debt at more than 60% of the value of its Bitcoin holdings. The weaker Bitcoin gets, the heavier the leverage 🧮
It’s not as though Wall Street hasn’t applauded. StoneX raised its price target from $32 to $43 and maintained its Buy rating. But the same document shows that StoneX participated in underwriting SATS’s initial offering, and an affiliate is the sales agent for the ATM program. That bullish report deserves, at the very least, a discount.
My view: the real dividing line between Bitcoin treasury companies isn’t how many coins they’ve bought, but where the money came from. Strategy is buying back shares at a discount to reduce its future dividend obligations. Strive is exchanging a fixed 15% cost for a 13.9% increase in Bitcoin per share. As long as Bitcoin’s annualized gains comfortably exceed the dividend cost, the cycle can keep turning. But if Bitcoin moves sideways, the 8.4% cash outflow will eat into book profits first—and preferred shareholders always rank ahead of common shareholders.
Both are called Bitcoin treasury companies. One is reducing leverage; the other is adding it. Do you think this is clever financial engineering, or the next ticking time bomb? Share your thoughts in the comments.
Every day, I bring you the latest on Bitcoin and Bitcoin treasury companies—not just what’s happening, but the logic and opportunities behind it 👀🚀
Bought 6,182 Bitcoin in One Week: A Bitcoin Treasury Company Has Taken on Twice Strategy’s Leverage 🦖
📊 进群看每日策略
On October 26, Strive disclosed that it bought 6,182 Bitcoin between October 17 and 23, bringing its holdings to 43,000. In the same week, Strategy bought none—and spent $204.9 million buying back its own preferred stock.
The contrast isn’t in how much they bought. It’s in how they financed it.
Strive just completed a $630 million offering of SATS perpetual preferred stock, selling 7 million shares at $90 each. It then set up an at-the-market offering program of up to $1 billion. Using the same Bitcoin price of $80,000 for both companies, Strive’s preferred stock has a face value of $2.103 billion, or 61.1% of the $3.44 billion value of its Bitcoin holdings. Strategy’s convertible debt and preferred stock total $20.061 billion, or 29.6% of the $67.881 billion value of its holdings. At the same Bitcoin price, Strive’s preferred capital as a share of its Bitcoin holdings is more than twice Strategy’s.
The cost is written into the dividends. SATS pays a fixed annual dividend of 15%, based on a face value of $100 per share. The first tranche alone will cost $105 million a year—16.7% of the $630 million raised. The two classes of preferred stock together will cost about $287 million a year, equal to 8.4% of the value of its Bitcoin holdings. Strategy’s annual dividends and interest total $1.509 billion, just 2.2% of its holdings’ value.
The company has $504.4 million in cash on its books, and has already set aside $157.5 million as a dividend reserve for the first 18 months. The prospectus is blunt: future dividends will be funded mainly through new financing, including the $1 billion ATM program. Put another way, it’s using new money to pay old dividends. If the financing window closes, the whole chain tightens immediately ⚠️
The reason it can do this is that the amount of Bitcoin represented by each share is genuinely increasing. From October 16 to 23, fully diluted Bitcoin per share rose from 29,039 sats to 33,066 sats—a 13.9% increase in one week. Management’s goal is also clear: as long as Bitcoin is below $100,000, keep preferred stock and debt at more than 60% of the value of its Bitcoin holdings. The weaker Bitcoin gets, the heavier the leverage 🧮
It’s not as though Wall Street hasn’t applauded. StoneX raised its price target from $32 to $43 and maintained its Buy rating. But the same document shows that StoneX participated in underwriting SATS’s initial offering, and an affiliate is the sales agent for the ATM program. That bullish report deserves, at the very least, a discount.
My view: the real dividing line between Bitcoin treasury companies isn’t how many coins they’ve bought, but where the money came from. Strategy is buying back shares at a discount to reduce its future dividend obligations. Strive is exchanging a fixed 15% cost for a 13.9% increase in Bitcoin per share. As long as Bitcoin’s annualized gains comfortably exceed the dividend cost, the cycle can keep turning. But if Bitcoin moves sideways, the 8.4% cash outflow will eat into book profits first—and preferred shareholders always rank ahead of common shareholders.
Both are called Bitcoin treasury companies. One is reducing leverage; the other is adding it. Do you think this is clever financial engineering, or the next ticking time bomb? Share your thoughts in the comments.
Every day, I bring you the latest on Bitcoin and Bitcoin treasury companies—not just what’s happening, but the logic and opportunities behind it 👀🚀