Distressed-debt funds holding Strategy Inc.’s preferred shares are reportedly in talks with Moelis & Co. about a possible securities exchange.
The discussions come as Strategy faces pressure from continued weakness in the cryptocurrency market.
Investors Explore Alternative Securities
According to Bloomberg News, investors are considering swapping their current preferred shares for other preferred shares at a discounted price.
Another option under discussion could involve exchanging the holdings for common shares, people familiar with the matter said.
Strategy Shares Remain Under Pressure
Strategy Inc.’s common stock has fallen by around 75% over the past year.
The sharp decline has increased pressure on holders of the company’s securities, especially as the firm remains closely tied to Bitcoin market performance.
Deal Could Use Section 3(a)(9) Exchange
Any potential transaction would likely be structured as a Section 3(a)(9) exchange, according to the report.
This type of exchange can allow a company to swap securities with existing holders under certain conditions.
