Saylor Doubles Down on Bitcoin, Raising Funds Through Preferred Stock Issuance

MicroStrategy Plans $500M Preferred Stock Offering to Expand Bitcoin Holdings

MicroStrategy (MSTR), the largest publicly traded corporate holder of Bitcoin, is launching a $500 million offering of Perpetual Strife Preferred Stock (STRF) to fund additional BTC purchases. However, signs suggest investor enthusiasm for its fundraising strategy may be waning.

The new preferred stock issuance carries a 10% annual cash dividend, paid quarterly. If dividends go unpaid, they will accrue at an additional 1% per quarter, up to a maximum of 18%, according to an SEC filing. The first dividend payout is scheduled for June 30, 2025.

Unlike common shares, STRF does not grant voting rights but comes with a $100 per share liquidation preference. MicroStrategy has the option to redeem the shares under specific conditions, such as if less than 25% of the original issue remains. Investors, on the other hand, can demand a buyback in the event of a fundamental change.

This follows MicroStrategy’s previous preferred stock (STRK), which debuted with an 8% yield. Prior fundraising rounds relied heavily on convertible debt, often issued at 0% interest.

The company anticipates STRF will be listed on Nasdaq within 30 days of issuance, providing investors with a high-yield alternative to gain Bitcoin exposure. The offering is being managed by Morgan Stanley, Barclays, Citigroup, and Moelis & Company under an SEC shelf registration.

After aggressively accumulating Bitcoin in recent months, MicroStrategy’s buying activity has slowed significantly. Last week, the company purchased just 130 BTC for $10.7 million, bringing its total holdings to 499,226 BTC.

Shares of MSTR fell 5% in early Tuesday trading, reflecting broader market weakness as Bitcoin dipped from $84,000 to $81,300.

About The Author

ctleditor

See author's posts