Strike Microstrategy to Raise Funds for Bitcoin with Preferred Stock

Microstrategy, a business intelligence firm, has made headlines for its bold move to raise funds for Bitcoin through preferred stock. In 2020, the company issued $650 million in convertible senior notes.

This move was a significant step for Microstrategy, as it allowed the company to raise funds without diluting its existing stock. The convertible senior notes can be converted into shares of Microstrategy's common stock at a later date.

The funds raised through this preferred stock issuance were used to purchase a substantial amount of Bitcoin, further solidifying Microstrategy's commitment to the cryptocurrency. The company's CEO, Michael Saylor, has been a vocal advocate for Bitcoin.

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MicroStrategy announced the pricing of its offering on January 30, 2025, of 7,300,000 shares of 8.00 percent Series A Perpetual Strike Preferred Stock.

The company plans to use the net proceeds from the offering for general corporate purposes, including the buying of bitcoin and for working capital.

The net proceeds to MicroStrategy from the offering will be about $563.4 million, after removing the underwriting discounts and commissions and the company's estimated offering expenses.

Holders of the perpetual strike preferred stock will have the right to convert their shares on any business day into shares of MicroStrategy's class A common stock at the then-applicable conversion rate.

The initial conversion rate is 0.1000 shares of MicroStrategy's class A common stock per share of perpetual strike preferred stock, which represents an initial conversion price of $1,000.00 per share of MicroStrategy's class A common stock.

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MicroStrategy Incorporated announced the pricing of its offering of 7,300,000 shares of 8.00 percent Series A Perpetual Strike Preferred Stock at $80.00 per share.

The company plans to use the net proceeds from the offering for general corporate purposes, including buying bitcoin and working capital.

The perpetual strike preferred stock will have the right to convert into shares of MicroStrategy's class A common stock at the then-applicable conversion rate.

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The initial conversion rate is 0.1000 shares of MicroStrategy's class A common stock per share of perpetual strike preferred stock, representing an initial conversion price of $1,000.00 per share.

The company estimates that the net proceeds to it from the offering will be about $563.4 million, after removing underwriting discounts and commissions and estimated offering expenses.

MicroStrategy will settle the issuance and sale of the perpetual strike preferred stock on February 5, 2025, subject to customary closing conditions.

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MicroStrategy has taken a bold approach to its treasury by adopting a Bitcoin strategy, and it's paying off big time. As of now, their 471,107 BTCs represent a whopping 57.32% of their market cap.

This move has led to a huge turnaround in their stock market performance, with a BTC Yield of about 2.9% year-to-date.

The company is backed by reputable global investors, including Capital Group with over $2 trillion in AUM and Norges Bank with over $1.7 trillion in AUM.

These investors have given MicroStrategy the confidence to grow its BTC holdings to a million in the near term.

More investors are now identifying Bitcoin as a better store of value than Gold, especially amid long-term macroeconomic uncertainty.

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