MicroStrategy Plans $2B Stock Sale to Buy Bitcoin

• MicroStrategy proposes a $2B stock offering to grow its Bitcoin holdings.
• The company holds 446,400 Bitcoin valued at $43.9B, with a 57% profit.

MicroStrategy Inc. (MSTR) is seeking to raise up to $2 billion in perpetual preferred stock to strengthen its treasury. This move will help fund the company’s ambitious 21/21 Plan, which aims to raise $21 billion in equity and fixed income products over three years. The company will sell the securities issued, registered with the U.S. The company has scheduled this offering for the first quarter of 2025, subject to favorable market conditions and discretionary decisions by the company, and it is approved by the SEC.

This MicroStrategy perpetual preferred stock offering is available in three ways that will help in raising funds such as conversion from Class A common stock, cash dividend issuance, and redemption of shares. This is one of the strategic moves that the company has been taking on its balance sheet through Bitcoin acquisition.

Apart from this, the equity and fixed-income instruments worth about $21 billion which MicroStrategy has been raising the last few months by senior convertible notes and debt. The new equity offering will come during the present quarter, although MicroStrategy enjoys discretionary rights to either move forward or pull out based on the market and other conditions.

To say that the class of perpetual preferred stock will outrank the preferred company’s common equity means that on a bankruptcy/liquidation proceeding, the prior rank will create a further and added layer of protection for those investors.

Strategy Behind MicroStrategy’s Bitcoin Approach

MicroStrategy carries 446,400 Bitcoin in its balance sheet. Altogether, the company has spent nearly $43.9 billion buying Bitcoin since it started the program. The average cost of each Bitcoin has been at $62,500 since it began. It has done a very excellent job for its desired intention to buy Bitcoin. Within this year 2024, it bought 257,250 Bitcoin alone, which is the largest purchase so far.

As said by Michael Saylor, the executive chairman of the company, such a policy regarding the holding of Bitcoins has pushed the company into enlarging bitcoin holdings and remarkably raising stocks. MicroStrategy shares (MSTR) rose 13.2% to $339.6 on January 3. This was a 438% increase from a year ago at the same period.

As the company continues to commit significant investments towards Bitcoin, such a stock offering should be seen to represent a serious step forward integrating the cryptocurrency to its operations further, which trend has been lately witnessed to relate to the emergence of institutionalization in the marketplace.