MicroStrategy Plans $2B Preferred Stock Offering to Boost Bitcoin Holdings
MicroStrategy, the largest corporate Bitcoin holder, is considering a $2 billion perpetual preferred stock offering to acquire more Bitcoin. This move aligns with the company’s “21/21” plan to consolidate its position in the cryptocurrency market.
In a January 3 statement, the firm outlined that the preferred stock could be funded by converting its class A common stock, paying cash dividends, redeeming shares, or a mix of these options. This initiative is distinct from MicroStrategy’s existing strategy to raise $21 billion through equity and fixed-income instruments, which has already fueled significant Bitcoin purchases using convertible notes and debt.
Source: Michael Saylor
The new stock offering, intended to bolster MicroStrategy’s financial position and expand its Bitcoin portfolio, is anticipated within this quarter. However, the company emphasized that proceeding with the plan depends on market conditions and internal decisions, noting it might not move forward with the offering.
The perpetual preferred stock would have a “senior” status over class A common stock, meaning its holders would have priority in bankruptcy or liquidation scenarios.
MicroStrategy currently owns 446,400 Bitcoin valued at $43.9 billion, according to Bitcoin Treasuries. In 2024 alone, the firm acquired 257,250 Bitcoin, marking its most aggressive purchasing year to date. These holdings were purchased at an average price of $62,500 per Bitcoin, giving the company a 57.2% profit on its investment.
The firm’s Bitcoin acquisition strategy is largely attributed to Michael Saylor, its executive chairman, who has championed corporate Bitcoin adoption globally. This approach has also significantly boosted MicroStrategy’s stock (MSTR), which surged 13.2% on January 3 to $339.6, marking a 438% increase year-over-year.
MSTR’s change in share price on Jan. 3, including after-hours. Source: Google Finance
However, MSTR shares dipped slightly by 0.19% in after-hours trading following the announcement of the preferred stock offering.
