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Strive, Inc. (NASDAQ:ASST) purchased 1,110 <a href="https://xpertsstudio.com/bull-market-seeds-may-be-planted-for-bitcoin-bet-on-btcu/” title=”Bull Market Seeds May Be Planted for Bitcoin. Bet on BTCU.”>Bitcoin for approximately $81.5 million between August 17 and August 21, paying an average of $73,409 per coin, including fees and expenses. The acquisition increased its holdings from 20,246 Bitcoin to 21,356, a 5.5% gain.
The more important result was smaller. Strive, Inc. (NASDAQ:ASST) increased Bitcoin per assumed diluted share from approximately 22,671 satoshis to 22,976 satoshis, or 1.3%. Its company-defined assumed fully diluted share count rose from approximately 89.3 million to 92.9 million and excludes 26.6 million shares underlying traditional warrants.
Bull Case
Strive, Inc. (NASDAQ:ASST) bought the latest Bitcoin tranche below the cryptocurrency’s subsequent market price. Bitcoin traded near $78,900 in U.S. spot markets late on August 24, approximately 7.5% above Strive’s $73,409 average purchase cost. The newly acquired coins consequently carried a market value above their acquisition cost.
Cash also increased alongside common and preferred stock issuance. Strive, Inc. (NASDAQ:ASST) ended August 21 with $171.9 million of cash and cash equivalents, up $17.1 million from one week earlier, despite completing the Bitcoin purchase. That balance provides capacity for additional acquisitions and corporate expenses.
The common issuance was modestly accretive to Bitcoin per assumed diluted share, although that metric excludes the preferred financing. Strive, Inc. (NASDAQ:ASST) acquired Bitcoin faster than its assumed diluted common-share count increased, producing limited but positive exposure growth for each assumed diluted share.
Bear Case
Most of the headline increase in Bitcoin holdings was absorbed by a larger capital base. Class A shares outstanding or sold for next-business-day issuance at Strive, Inc. (NASDAQ:ASST) increased by 3,646,300, or 4.8%, to approximately 79.9 million.
The company also issued 441,313 SATA perpetual preferred shares, increasing that class by 5.6%. Those new shares represent at least $44.1 million of additional senior liquidation preference and approximately $5.7 million of annual dividends at the current 13% rate.
The preferred shares are not included in Strive’s assumed diluted common-share denominator. Traditional warrants are also excluded, even though their exercise would increase the number of common shares sharing in the Bitcoin treasury.
For Strive, Inc. (NASDAQ:ASST), increasing total Bitcoin is not enough. Issuing securities creates value for common shareholders only when the assets acquired and capital retained exceed the effects of common dilution, preferred claims, liabilities, and financing costs. A 5.5% increase in Bitcoin producing only 1.3% growth per assumed diluted share shows how much of the asset growth went toward expanding the capital base.
Source: finance.yahoo.com