- Strive (ASST) priced an upsized follow-on of its Variable Rate Series A Perpetual Preferred Stock (SATA) at $90 per share to address convertible debt.
- The company plans to use proceeds to pay down Semler Scientific’s 4.25% Convertible Senior Notes due 2030 and expects exchange agreements for $90 million principal.
- About 930,000 newly issued SATA shares will be exchanged directly for convertibles; up to 2.25 million shares may be issued in total.
- SATA carries a variable dividend at 12.25%, has no maturity or conversion feature, and is treated as equity to improve leverage metrics.
- This structure could offer a template for Strategy (MSTR), which has roughly $8.3 billion of outstanding convertible notes.
On Thursday, Strive (ASST) priced an upsized follow-on offering of its Variable Rate Series A Perpetual Preferred Stock SATA at $90 per share, a move the company said it will use to retire convertible debt and restructure its balance sheet, according to a follow-on offering filing. The offering was increased beyond an initial $150 million to allow issuance of up to 2.25 million SATA shares in aggregate.
Strive said it intends to use net proceeds to pay down the 4.25% Convertible Senior Notes due 2030 that are guaranteed by Semler Scientific. The company expects to enter exchange agreements with certain noteholders representing $90 million in aggregate principal, and to exchange approximately 930,000 newly issued SATA shares directly for those convertibles.
The remaining net proceeds, together with cash on hand and potential proceeds from terminating existing capped call transactions, are expected to be used to redeem or repurchase any remaining Semler convertibles, repay borrowings under Semler Scientific’s Coinbase Credit facility, and to fund additional Bitcoin purchases.
By replacing fixed-maturity convertible debt with perpetual preferred equity, Strive converts debt-like obligations into instruments treated as equity on the balance sheet. SATA carries a variable dividend currently set at 12.25%, has no maturity or conversion feature, and offers liquidity and seniority over common stock while improving reported leverage metrics.
The same approach could be relevant to Strategy (MSTR), which has roughly $8.3 billion of outstanding convertible notes. The largest tranche is a $3 billion issue with a June 2, 2028 put date and a $672.40 conversion price, about 300% above the current share price near $160. The use of preferred equity to retire or exchange such debt could offer executive chairman Michael Saylor an additional avenue to reduce future maturity risk.
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