Strive Makes Significant Debt Payment and Expands Bitcoin Holdings
Bitcoin treasury firm Strive has recently managed to pay off 92% of the debt inherited from its acquisition of Semler Scientific earlier this month. Additionally, the company announced it has bought another 334 Bitcoins following its preferred stock offering.
On Wednesday, Strive indicated it anticipates around $600 million in demand for its floating rate Series A perpetual preferred stock, now listed on SATA. As a result, their fundraising target has been raised from $150 million to $225 million.
This equity offering serves as a long-term funding method aimed at acquiring Bitcoin (BTC) while keeping leverage in check.
Strive, which is backed by Vivek Ramaswamy, finalized its purchase of the former Bitcoin finance company Semler Scientific on January 13, following a merger agreement made in September.
Earlier this month, Strive mentioned it would utilize the funds from the stock offering, along with potential proceeds from unwinding certain cash and hedging transactions, to reduce debt. The remaining capital is slated for Bitcoin and Bitcoin-related product acquisitions.
On Wednesday, the firm announced that it would use the funds to pay off $110 million, or 92%, of Semler’s assumed debt. This includes the full repayment of $90 million in convertible notes and a $20 million credit loan from Coinbase in return for SATA stock.
With the termination of the Coinbase loan, Strive noted that its Bitcoin holdings are now unencumbered. The company also plans to eliminate the remaining $10 million in debt within the next four months.
As a result of its recent Bitcoin acquisition, Strive has become one of the top 10 corporate Bitcoin finance companies, having purchased 333.9 Bitcoin at an average price of $89,851, bringing its total to 13,132 BTC, valued at approximately $1.17 billion.
Strive highlighted a Bitcoin yield of 21.2% quarter-to-date, indicating the growth rate of Bitcoin exposure per common stock over this timeframe.
Despite these positive developments, Strive’s stock took a dip on Wednesday. The balance sheet improvements were not sufficient to prevent the ASST stock from falling by 2.23% to $0.80, as noted by Google Finance data.
ASST is now down 92.4% from its peak of $10.46, which came after the announcement of its Bitcoin strategy, reflecting the volatility and risks tied to corporate Bitcoin treasury strategies.
Meanwhile, the trend of Bitcoin government bonds gained traction among institutions in early 2024; however, questions regarding the sustainability of such strategies arose, leading to declines in many companies’ stock prices in the latter half of last year.
Currently, over 190 publicly traded companies possess Bitcoin on their balance sheets, collectively holding approximately 1,134,000 Bitcoins, which amounts to around 5.4% of the overall cryptocurrency supply.
Interestingly, nearly 63% of corporate Bitcoin holdings can be attributed to Michael Saylor’s strategy, which continues to acquire new Bitcoin despite recent downturns in the broader cryptocurrency market.
