Analysts Believe Institutions Are Positioned for MicroStrategy’s Preferred Stock Sale.

MicroStrategy Debuts Perpetual Preferred Stock Offering, Drawing Attention from Institutional Investors

MicroStrategy (MSTR), renowned for its innovative capital-raising strategies to fund Bitcoin (BTC) purchases, has launched a new financial instrument this week—a perpetual preferred stock offering (STRK). Under the leadership of Executive Chairman Michael Saylor, the company continues to lead in creative approaches to acquiring Bitcoin.

Preferred stock sits between debt and equity on a corporate balance sheet, offering investors the predictable returns of bonds while also granting them ownership stakes in the company.

Ben Werkman, a well-followed MicroStrategy analyst, shared his insights on X regarding the appeal of preferred stock for institutional investors. He highlighted its stable yield, absence of maturity risk, and potential for equity upside as key features attracting large-scale investors.

“I could foresee a scenario where preferred stock replaces some convertible bonds for fixed-income accumulation due to its lack of maturity risk,” Werkman said. “Preferred stock could provide significantly higher returns than convertible bonds and certainly outperform direct equity sales.”

Jeff Park, Head of Alpha Strategies at Bitwise Investments, also praised MicroStrategy’s preferred stock offering, calling it one of the most attractive investment opportunities in today’s market and a cutting-edge financial tool.

“STRK is a near-perfect instrument,” Park noted. “It offers two major ways to profit: First, if interest rates fall, the principal benefits; second, if MicroStrategy’s stock rises, investors can convert and own a more volatile asset or simply sell it.”

The largest U.S. preferred stock ETF, BlackRock iShares Preferred and Income Securities ETF (PFF), manages roughly $15 billion in assets, with major investors such as Boeing (BA), Wells Fargo (WFC), and Citi Group (C).

MicroStrategy plans to finalize and announce the pricing details for its new preferred stock offering after the market closes on Thursday.