Strive, the asset manager co-founded by former U.S. presidential candidate Vivek Ramaswamy, is embarking on a significant financial maneuver, aiming to raise up to $150 million. This strategic move is designed to fortify its balance sheet by tackling existing debt and substantially increasing its Bitcoin (BTC) treasury, following a recent key acquisition.
Strategic Capital Raise and Debt Restructuring
Strive announced plans to offer Series A perpetual preferred shares, trading under the symbol SATA, to secure up to $150 million. The proceeds from this offering, combined with existing cash and potential hedging liquidations, are primarily earmarked for paying down debts associated with its wholly-owned subsidiary, Semler Scientific. This includes repurchasing a portion of Semler's 4.25% senior convertible bonds due in 2030 and outstanding loans with Coinbase Credit. Strive’s objective is to simplify its financial structure and return to a "perpetual preferred-only amplification model." Additionally, the company is open to private debt-for-equity swaps with Semler bondholders, allowing them to exchange debt for SATA preferred shares. These preferred shares offer an attractive initial annual dividend rate of 12.25%, paid monthly in cash.
Expanding Bitcoin Holdings Amidst Market Challenges
Beyond debt management, any remaining funds from the capital raise will be strategically allocated towards acquiring more Bitcoin (BTC) and related products. This builds on Strive's proactive cryptocurrency strategy, notably its recent all-stock acquisition of Semler Scientific. This acquisition not only integrated Semler’s operational assets but also added its substantial 5,048.1 Bitcoins to Strive’s treasury, boosting Strive’s total BTC holdings to an impressive 12,797.9 BTC. This aggressive Bitcoin accumulation comes at a time when the broader digital asset treasury sector faces considerable headwinds, with industry experts forecasting potential widespread closures for many crypto-dependent businesses by 2026, especially those heavily invested in altcoins, due to falling prices and valuation pressures. Strive’s bold move positions it to strengthen its digital asset reserves amidst a challenging market outlook.
