Main notes
- Strife, the preferred stock of strategy, lives on the Nasdak Stock Exchange.
- The arrow, designed to finance the huge bitcoin purchases, has a different appeal from the company's traditional stocks.
- The strategy is still the largest company holder in Bitcoin, with plans to buy more.
Michael Sailor, founder and head of the strategy, has announced the launch of the “series” series of the series A Perpertual Preferred Stock (STRF) of the company “on the Nasdak Stock Exchange. With Strf now on the NASDAQ Stock Exchange, many expect to increase visibility and liquidity for the new share.
The positive trend surrounding the conflict can raise the market's view of the coding, and may enhance the value of the shared shares of the strategy (MSTR).
Strf's Strategy
Strf share capital is designed for public companies, while maintaining a large amount of Bitcoin (BTC) acquisitions and operating capital. The strategy has presented the new stocks to attract investors looking for lower fluctuations than MSTR.
This new tool differs from previous offers of strategy with regard to conversion, such as Strk favorite stocks.
While STRK allows conversion to property rights, the conflict does not include transfer rights. Instead, Strf's stock profits are collected at a preliminary rate of 10 % annually, accurately in cash, with no shares or alternatives to stocks.
However, the profit distribution rate increases by 1 % annually, up to 18 % if the company keeps payment. It is worth noting that the Board of Directors can withhold profits completely, which means that the returns of investors are far from the guarantee.
The strategy offered STRF shares at a $ 100 liquidation price per share. The major financial institutions, including Morgan Stanley, Barclays and Citigroup, support the new offer as a guarantee.
Fidelity Investment also participates in the distribution of the product to retailers.
The contribution of these companies indicates confidence in the strategy's ability to attract buyers despite the unusual design of the product.
Investors raise concerns about Strf
Strf shares are designed to provide BTC's return on MSTR investors, which means that it is likely to use the revenue strategy to buy more bitcoin.
For context, the strategy, previously known as Microstrategy, is famous for the aggressive bitcoin purchases. The company bought 6,911 BTC earlier this week to raise its total possessions to 506137 BTC.
Despite the strong support of the company for Bitcoin, a lot of concern about the new stock offer for the strategy. BTC's return may decrease if the bitcoin price is running or decreases, which reduces the attractiveness of this mixed security.
The asymmetric Strife structure also raises questions about its attractiveness. Investors are particularly concerned that the company does not depend on the operating revenues to finance the stock profits.
Bitcoin Bear long can also lead to a decrease in the MSTR share price. This may indirectly affect the instability of STRF, as investors may lose confidence in the company's heavy budget budget.
Modern deposits indicate that the strategy may raise new capital by selling additional shares or other securities to meet payment obligations. According to what was reported, the strategy was held less than $ 50 million in cash after the launch of its new shares, with the continuation of the basic software work in the post -losses.
Covering cash profits on hundreds of millions of favorite stocks may require a continuous release of new tools, which increased the risk of mitigating the current shareholders.
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Benjamin Jodfrey is a blockchain lover and journalist who enjoys writing about the real life applications of Blockchain technology and innovations to pay public acceptance and complementarity all over the world for emerging technology. His desire to educate people about encrypted currencies inspire his contributions to the media and famous sites in Blockchain.