MSTR Stock Eyes Rebound As Strategy Upsizes Debt Offering To $2.5 Billion

MicroStrategy’s MSTR stock showed signs of a possible rebound after the firm increased its planned preferred stock offering to $2.5 Billion.

The offering was announced on July 25 and is intended to support its ongoing Bitcoin investment plans.

MicroStrategy Eyes $2.5 Billion Through STRC Stock Sale

Strategy announced it had priced its new Series A Perpetual Stretch Preferred Stock (STRC) at $90 per share.

It is worth noting that the company has sold 28,011,111 shares, raising about $2.521 Billion.

After deducting costs and fees, Strategy expects to receive around $2.474 Billion. The deal is scheduled to settle on July 29.

This new round of funding is a significant step for the company. Strategy said the money would be used for general corporate purposes.

According to the update, this includes buying more Bitcoin and supporting its day-to-day business needs.

The STRC stock pays a variable dividend. It starts at 9.00% per year, based on a stated value of $100 per share.

According to the announcement, dividends will be paid monthly, starting August 31, 2025.

It is also important to note that the Strategy board can adjust the dividend rate under specific conditions.

However, they cannot reduce the rate by more than a set amount in one period, and cannot lower it below current market interest rates.

If any regular dividend is missed, it will be carried over and grow each month until paid. This is known as a compounded dividend.

Dividend Terms and Redemption Options Explained

According to the official release, Strategy included several features in the STRC terms.

The company has the option to repurchase the shares at any time after they are listed on exchanges such as the Nasdaq or NYSE.

The price would be at least $101 per share, plus any unpaid dividends. There are also two special cases where Strategy can redeem all outstanding shares.

One is if less than 25% of the STRC shares remain. This is called a “clean-up” redemption. The other is if a tax-related event affects the offering.

Holders of the STRC MSTR Stock from MicroStrategy will also have certain rights. Notably, if a major event occurs, which Strategy describes as a “fundamental change,” they can take action.

Investors will reserve the right to request that the company repurchase their shares at $100 each. Any unpaid dividends would also be added to the repurchase amount.

The liquidation value of each share will be set daily. It will always be at least $100, but could rise depending on recent market prices and trading activity.

MSTR Stock is Steady as Market Reacts

MicroStrategy’s Class A (MSTR) stock is pegged at $405.89 at press time.

In pre-market hours, the stock dropped to $405, down 2.39%. The market cap is currently $114.04 billion.

This MSTR stock price movement came shortly after the public announcement of the upsized offering.

Analysts believe that investors may be weighing the impact of the new issuance on the company’s balance sheet and future earnings.

The fresh funds could help MicroStrategy grow its Bitcoin holdings, as planned. However, the decision to issue preferred shares may raise some investor concerns.

Questions may arise about how this move affects the company’s structure and long-term plans.

The market reaction was mixed following the announcement. Some investors may see the move as a positive signal.

It suggests that the company remains focused on expanding its bitcoin holdings, despite market fluctuations.

Meanwhile, Strategy bought 6,220 Bitcoin for a total of $739.8 million. This purchase came shortly after Bitcoin reached a new all-time high.