Strive adds 124 bitcoin as preferred dividend obligations grow

A 124-bitcoin purchase has lifted a corporate treasury to 43,124 coins, alongside a separately reported increase in preferred shares outstanding. Strive, Inc. NASDAQASST NASDAQSATA NASDAQSATS, the Dallas-based structured finance company building a bitcoin treasury, disclosed the Oct. 24 to Oct. 30 purchases in a Nov. 2 filing.

Strive paid an average of approximately US$80,526 per bitcoin, including fees and expenses. Multiplying that average by the coins purchased puts the outlay at about US$10 million, while its holdings table shows cash and cash equivalents fell US$14 million during the reporting period.

The same table records 3,418 additional shares of its fixed-rate SATS preferred stock. At the security's stated dividend terms, those shares add US$51,270 in annual cumulative dividends. Regular payment dates begin Nov. 9, subject to declaration.

Strive's common shares traded lower at US$21.66 on Nasdaq at 11:59 a.m. EST on Nov. 2, according to NASDAQASST.

Preferred Shares Carry Cumulative Dividends

Strive's Oct. 15 pricing announcement set the SATS annual dividend at 15 per cent of a US$100 stated amount. That means US$15 per share annually, with payments subject to board declaration and legally available funds.

The original offering priced seven million shares at US$90 each on Oct. 15. Its expected gross proceeds were US$630 million before underwriting discounts, commissions and expenses, so the stated dividend rate applied to a larger amount per share than the original sale price. The US$15 annual dividend was approximately 16.7 per cent of the US$90 gross proceeds per share at the Oct. 15 offering price, before expenses.

By Oct. 30, SATS shares outstanding had reached 7,003,418. Applying the stated annual dividend to that balance gives approximately US$105.05 million in cumulative annual distributions, before any further issuance or changes in the number outstanding.

Strive separately established an at-the-market sales agreement on Oct. 26 allowing up to US$1 billion of SATS sales. Agents can receive commissions of up to two per cent of gross proceeds, and Strive also agreed to reimburse certain expenses.

"The Company has no obligation to sell any of the ATM Shares, and may at any time suspend the offering of ATM Shares under the Sales Agreement or terminate the Sales Agreement," Strive said in the Oct. 26 filing.

The US$1 billion figure is a sales ceiling, not cash already received. The Nov. 2 holdings table gives the additional preferred-share count but does not give its sale price or net proceeds, preventing a calculation of the actual financing yield on those shares.

The Fully Diluted Share Count Was Unchanged

Strive reported US$490.4 million in cash and cash equivalents on Oct. 30, compared with US$504.4 million on Oct. 23. Its approximately US$10 million bitcoin purchase cannot, by itself, reconcile that cash decline, because the holdings table is not a statement of cash flows.

The Oct. 30 holdings table lists 127,331,109 effective common shares outstanding, an increase of 2,763 from Oct. 23. Strive defines that measure as its Class A and Class B common shares combined, so the two classes must be counted together when comparing treasury growth with common ownership.

Its assumed fully diluted share count remained 130,044,690 on both reporting dates, while outstanding options declined by 2,763. Bitcoin per assumed fully diluted share therefore increased approximately 0.29 per cent, calculated from the filed bitcoin balances and unchanged denominator.

That calculation does not deduct preferred dividends or value the claims of preferred shareholders. The Oct. 30 table also showed 14,030,176 variable-rate SATA preferred shares outstanding, unchanged from Oct. 23, alongside the growing SATS balance.

The capital-allocation comparison is with Strategy Inc NASDAQMSTR NASDAQSTRC, the bitcoin treasury company whose preferred shares Strive also holds. Strategy's Nov. 2 filing reported 811 bitcoin purchased and US$208.2 million spent repurchasing its variable-rate Stretch preferred shares.

Mugglehead's earlier report followed those bitcoin purchases and preferred repurchases. Strive's Nov. 2 filing showed its holding of Strategy's Stretch preferred shares unchanged at 505,000 as of Oct. 30, keeping that investment separate from its bitcoin balance. The filing values that position at US$50.061 million on Oct. 30, compared with US$50.177 million on Oct. 23. Those valuations sit outside the separately reported cash and cash equivalents balance.

Read more: Strategy buys 811 bitcoin alongside US$208.2M in preferred repurchases

The next scheduled test of Strive's new preferred funding is Nov. 9, when SATS regular dividend payment dates begin under the Oct. 15 terms. If declared in full, the first payment will include accrued and unpaid dividends from the closing date.