- Strategy completed $1.44 billion capital raise in just eight days through stock sale.
- Reserve fund covers 21 months of dividend payments, targeting eventual 24-month runway.
To alleviate growing investor anxiety caused by the ongoing Bitcoin bear market, Strategy has effectively obtained $1.44 billion of new capital. By selling stocks, the company finished the fundraising in a little more than a week, thus showing how it is still able to raise funds even when the market is tough.
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CEO Phong Le shared that the money-raising campaign was aimed at getting rid of any doubt about the company’s financial stability. The manager pointed out that Strategy is still very much part of the crypto world and, therefore, they wanted to preemptively calm down investors. According to Le, it was questioned whether the company would be able to meet its debt and dividend obligations if the stock price kept going down.
The reserve fund created will be able to cover at least twelve months of dividend payments at the very beginning, and then the coverage will be increased to twenty-four months. The company has raised enough capital to cover twenty-one months of dividends in about eight days, as per Le’s statement. This very quick transaction was to signal that Strategy still has access to the market despite the fall in the price of Bitcoin.
Le refused the idea that the company would be in financial difficulties, stating that there was no immediate necessity to sell the Bitcoin holdings. Nevertheless, he admitted that the negative speculation was causing investors to increase short positions on Bitcoin. The capital raise is a move to remove the uncertainty and also to show that the company is still able to raise funds when it is in a downturn.
Strategy has additionally unveiled a BTC Credit dashboard that, according to the report, displays enough assets to cover dividends for more than seventy years. In a statement only a week ago, Le said that the business would sell Bitcoin only if the stock price fell below net asset value and the capital markets were closed.
This decision is related to the fact that analysts have drastically lowered the company’s price targets. However, a few have retained that the fear of a forced sale is overstated. The interaction of Strategy vehemently tackling the market scepticism is a sign of the management’s resolve to keep the investor’s trust during the turbulent cycles of the cryptocurrency market.
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Source: https://thenewscrypto.com/strategy-raises-1-44b-to-combat-investor-concerns-during-bitcoin-downturn/
