A regulatory filing shows $369.2 million of expected gross proceeds from the last warrants and about $235 million of bitcoin bought at an average near $83,266. The shares fell 10.5%, and a research firm this week called Strategy's preferred-stock model a mistake.
Strive's last traditional warrants have been exercised or have expired. What funds its next purchases is now the question.
The bitcoin treasury company said in a regulatory filing Wednesday that holders exercised 273,493,909 warrants on Oct. 12 and 13 to buy 13,674,703 Class A shares, for expected gross proceeds of $369.2 million. As of the close of business on Oct. 13, no traditional warrants issued in connection with its earlier private placement remained outstanding.
Over the same two days, Strive bought 2,822 bitcoin at an average price of about $83,266, including fees, for roughly $235 million, leaving about $134 million of the latest proceeds not shown as spent. Together with 3,311 bitcoin bought from Oct. 5 to 9, it has added 6,133 coins since Oct. 5.
The ranking
Chief Executive Matt Cole said the company now holds 35,595 bitcoin and that 94% of its traditional warrants were exercised in aggregate. By the count of the tracker BitcoinTreasuries, that puts Strive fourth among public companies, 18 coins ahead of MARA Holdings at 35,577. Strategy leads with 848,250, followed by Metaplanet with 44,000 and Twenty One with 43,514. An 18-coin margin can change with a single purchase or sale.
The market's reaction
Strive's stock fell about 10.5% to $24.71 by early afternoon. The new shares from the warrant exercise equal roughly 13.5% of the 101.2 million Class A shares the company had outstanding as of Oct. 9, and the broader crypto market was also weak.
Its SATA preferred stock slipped about 1.5% to $97.29, below its $100 stated amount, the price that matters for Strive's at-the-market sales. That matters because Strive's remaining funding routes, selling SATA through an at-the-market program and launching a proposed new preferred series carrying a 15% coupon, work best when its preferred shares trade at or above that level.
The critique of preferreds
This week, research firm K33 published an analysis of Strategy's STRC preferred stock that bears directly on Strive's plan. K33 put Strategy's annual preferred dividend bill at about $1.56 billion, up from about $830 million, and estimated that STRC's expansion this year accounted for about $725 million of that increase, roughly 8,740 bitcoin at $83,000. Without STRC in the first half, it calculated, Strategy would hold 843,303 bitcoin rather than 848,250, a difference of 4,947 coins, a comparison that assumes the cash reserve and buybacks funded by STRC would otherwise have gone into bitcoin.
"Was the pref model a mistake? We believe the answer to that question is yes," K33 wrote. Its argument is that a cash reserve earning an assumed 4% is supporting a 12% coupon, and that plain common stock sales would be a more efficient way to buy bitcoin. STRC's rate is 12% for October record dates.
K33 did not predict that Strategy would sell bitcoin to pay dividends, and noted the cash reserve reduces that risk.
Market implications
The supportive reading is that Strive executed: it raised most of the remaining warrant capital, put much of it into bitcoin within days and climbed the rankings. The critical reading is that the cheapest source of funding is now gone, its preferred trades below par and the costs of preferred-funded bitcoin are drawing scrutiny just as interest rate expectations rise.
What to watch
Pricing of Strive's new preferred offering, whether SATA recovers to its $100 stated amount, and further purchases by Strive or MARA that could reorder the rankings.