Key Takeaways
- Tom Lee's Bitmine is offering preferred shares with a 9.5% dividend yield, according to Decrypt.
- The aim is to raise capital to buy Ethereum.
- Preferred shares pay a fixed dividend and rank ahead of common stock for payouts.
- It is an example of using equity markets to fund a crypto treasury strategy.
Bitmine, associated with market commentator Tom Lee, is offering preferred shares with a 9.5% dividend yield to fund purchases of Ethereum, according to Decrypt.
What preferred shares are
Preferred shares are a type of stock that typically pays a fixed dividend and sits ahead of common shares when a company distributes payouts. Offering a high yield can attract investors looking for income, while giving the company cash to deploy.
Funding a crypto strategy
Using a share sale to accumulate Ethereum is a notable twist on the treasury-company model. It ties the firm's obligations to investors to the performance of a volatile asset. For potential buyers, the headline yield needs to be weighed against that underlying risk.
This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and carry risk. Always do your own research before investing.
