Strive Announces $500M Preferred Stock Offering Featuring 15% Dividend

Strive, Inc. (Nasdaq: ASST) is launching a $500 million perpetual preferred stock offering with a 15% fixed dividend. The company intends to use the proceeds to fund bitcoin acquisitions and general corporate operations. This capital raise adds a higher-cost, junior-ranking security to the company's balance sheet, representing a change in its financing strategy.

Strive plans to issue 5,000,000 shares of its 15.00% Series A Perpetual SATS Preferred Stock at a price of $100 per share. The offering depends on market conditions, and the company has not yet set a definitive pricing or closing date, as noted in a report from Investing.com.

"The SATS preferred stock ranks junior to Strive's existing SATA preferred stock, which currently carries a variable dividend rate of 13%," according to a report from GNCrypto.

Capital Structure and Risk

The new SATS offering sits lower in the capital stack than the existing SATA securities. If the company faces liquidation or insolvency, holders of the SATA preferred stock are entitled to payment before SATS holders. To address investor concerns about the high dividend obligation, Strive intends to establish a dividend reserve at closing. This reserve will be funded by existing cash and securities to cover 18 months of payments, totaling $22.50 per share.

Why the 15% Hurdle Rate?

The cost of this capital reflects the company's growth strategy. Strive uses bitcoin as its hurdle rate for capital deployment. A hurdle rate is the minimum rate of return an organization requires before committing capital to an investment. By setting a 15% dividend, the company indicates it expects its bitcoin-related investments to generate returns exceeding this financing cost.

This approach shows the company's reliance on external financing to fuel its digital asset accumulation. Because the dividend is fixed at 15%, Strive faces a recurring obligation regardless of volatility in bitcoin markets. The success of this capital raise depends on market appetite for junior-ranking, high-yield instruments in the current interest rate environment.