MicroStrategy to Raise $2 Billion in Perpetual Preferred Stock to Buy More Bitcoin

MicroStrategy, the leading corporate holder of Bitcoin, announced plans to raise $2 billion through a perpetual preferred stock offering to further bolster its Bitcoin reserves.   The company intends to utilize the funds to acquire additional Bitcoin, moving closer to its ambitious "21/21" plan. This involves raising $21 billion in equity and $21 billion in fixed-income instruments to significantly expand its Bitcoin holdings.

Exploring Strategic Funding Options

MicroStrategy has been actively exploring various avenues to finance its Bitcoin acquisition strategy. This includes leveraging senior convertible notes and debt instruments to fund recent Bitcoin purchases. The perpetual preferred stock offering represents a new strategic move to strengthen its balance sheet and acquire more Bitcoin.   

Key Features of the Perpetual Preferred Stock Offering

• The offering will be conducted by converting existing Class A common stock, paying a cash dividend, redeeming shares, or a combination of these methods.
• The perpetual preferred stock will hold a privileged position over Class A common stock in the event of bankruptcy or liquidation.
• MicroStrategy retains the sole discretion to proceed with the offering based on market conditions and other factors.

MicroStrategy's Bitcoin Holdings and Financial Performance

• MicroStrategy currently holds 446,400 Bitcoin, valued at approximately $43.9 billion.
• The company acquired a record 257,250 Bitcoin in 2024, demonstrating its strong commitment to its Bitcoin investment strategy.
• The average purchase price of MicroStrategy's Bitcoin holdings is $62,500, resulting in a 57.2% gain on its investment.
• Michael Saylor's Bitcoin-centric strategy has significantly impacted MicroStrategy's stock price. MSTR shares surged 13.2% on January 3, 2025, representing a 438% increase year-over-year.

Conclusion

MicroStrategy's pursuit of additional Bitcoin through the perpetual preferred stock offering underscores its unwavering commitment to its long-term Bitcoin investment strategy. This move positions the company as a key player in the evolving landscape of corporate Bitcoin adoption and highlights the growing influence of Bitcoin within the financial markets.

January 2025, Cryptoniteuae