MicroStrategy, the largest corporate holder of Bitcoin, plans to raise an additional $2 billion through a preferred stock offering to increase its Bitcoin holdings.
Details of the Offering
The company intends to raise finance through the issuance of perpetual preferred stock, which can be obtained by converting class A common stock, paying cash dividends, redeeming shares, or using a combination of these. This offering is separate from the company's ongoing plans to raise $21 billion in equity and $21 billion in fixed income.
MicroStrategy's Investment Strategy
The perpetual preferred stock is expected to be used by the company to strengthen its balance sheet and acquire more Bitcoin. However, the company explains that the decision to proceed with the offering depends on market and other conditions. MicroStrategy currently holds 446,400 Bitcoins valued at $43.9 billion, having acquired 257,250 Bitcoins in 2024 alone.
Impact on Shares and Performance
The perpetual preferred stock is senior to class A common stock in case of bankruptcy or liquidation. MicroStrategy's shares (MSTR) rose by 13.2% on Jan. 3, reaching $339.6 — up 438% from the same time last year. Since the announcement of the perpetual preferred stock plan, MSTR shares have marginally fallen by 0.19% in after-hours trading.
MicroStrategy's strategy to enhance its Bitcoin investment continues to evolve with plans to raise additional capital, pending potential market obstacles and conditions.
