Strive CEO asks for feedback on pausing SATA preferred stock issuance

Matt Cole, CEO of the Bitcoin-acquiring company Strive (ASST), announced on X that he is requesting market feedback on whether to temporarily pause the issuance of the company's preferred stock, SATA. Cole explained that short interest in SATA has increased by approximately 1 million shares over the past 30 days, alongside a rise in stock borrowing costs. He noted that while the goal is for SATA to maintain its $100 par value, some investors believe this value is acting as a price ceiling. According to Cole, pausing or adjusting the issuance could lead to greater short-term volatility but may be positive for the long-term stability of ASST and SATA. SATA reached an all-time low of $80.50 on June 26 but closed at $91.05 on June 30. Recently, concerns have spread throughout the market regarding companies like Strive, Strategy (MSTR), and Bitmine (BMNR), which have adopted a model of using dividend-focused preferred stock to fund cryptocurrency purchases. This model is designed to issue and sell new shares to buy crypto when the stock trades above its par value, and to increase the dividend yield to maintain the par value when it trades below. However, the prevailing concern is that amid a crypto market downturn and insufficient demand, these companies could exhaust their financial resources and be forced to sell their crypto holdings to cover preferred stock dividends. While the individual companies have dismissed this "death spiral" hypothesis, they have not clearly stated their position on the potential sale of their crypto assets.