Strive (ASST), a bitcoin treasury and asset management firm, is using a clever capital-markets maneuver that could offer a playbook for other crypto-heavy corporates — including MicroStrategy (MSTR). On Thursday Strive priced a follow-on of its Variable Rate Series A Perpetual Preferred Stock (ticker: SATA) at $90 a share, and upsized the deal beyond an initially announced $150 million to allow issuance of up to 2.25 million shares. The offering combines a public sale with privately negotiated exchanges of debt for stock. Why it matters: Strive plans to use the proceeds to shore up and simplify a complicated guarantee it made for Semler Scientific’s 4.25% Convertible Senior Notes due 2030. The company expects to enter exchange agreements with noteholders representing about $90 million of principal; roughly 930,000 newly issued SATA shares will be swapped directly for those convertibles. The remainder of the offering proceeds, together with cash on hand and possible proceeds from terminating capped-call transactions, will be used to redeem or repurchase any remaining Semler convertibles, pay down borrowings under Semler’s Coinbase credit facility, and potentially fund additional bitcoin purchases. How the trick works: Instead of refinancing fixed-maturity debt, Strive is converting it into perpetual preferred equity. SATA pays a variable dividend currently set at 12.25%, has no maturity date and offers no conversion feature back into common stock. Because perpetual preferreds are treated as equity on the balance sheet, the swap can improve leverage ratios and reduce near-term maturity cliffs. For holders of the convertibles, the tradeoff is giving up a conversion option into potentially upside common shares in exchange for a higher-yielding, perpetual, and fully liquid instrument that ranks senior to common equity. Why MicroStrategy could take note: Strategy (MSTR) carries roughly $8.3 billion of outstanding convertible notes and has a sizable exposure to debt maturities down the road. Notably, the largest tranche is a $3 billion issue with a June 2, 2028, put date and a $672.40 conversion price — roughly 300% above MicroStrategy’s current share price near $160. Meanwhile, MSTR’s outstanding perpetual preferred securities recently exceeded convertibles in notional value. Using preferred equity to retire or exchange convertibles could give executive chairman Michael Saylor another route to reduce future maturity risk and smooth the company’s capital structure. Bottom line: Strive’s deal is a concrete example of how bitcoin-focused firms can leverage perpetual preferreds to convert dated obligations into equity-like instruments, improving balance-sheet optics while retaining access to capital and the flexibility to continue bitcoin accumulation. For companies facing large convertible note walls, the approach offers an alternative to outright refinancing or repurchase — provided investors accept the tradeoffs between yield, liquidity and forfeited conversion upside. Read more AI-generated news on: undefined/news

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