MicroStrategy Eyes $2 Billion Preferred Stock Offering to Boost Bitcoin Holdings
MicroStrategy, the largest corporate holder of Bitcoin, has announced plans to raise $2 billion through a perpetual preferred stock offering. The move aims to bolster the company’s balance sheet and fund additional Bitcoin purchases, aligning with its ambitious “21/21” strategy.
A Bold Bitcoin Bet
The offering, announced on January 3, would allow MicroStrategy to issue perpetual preferred stock convertible into class A common stock, payable via cash dividends, share redemption, or a combination of methods. However, the company emphasized that market conditions will dictate whether the offering proceeds.
Separate From $21 Billion Plan
This initiative is independent of MicroStrategy’s ongoing efforts to raise $21 billion in equity and fixed-income instruments, which have already fueled its aggressive Bitcoin acquisitions through convertible notes and debt.
Currently, MicroStrategy holds 446,400 Bitcoin valued at $43.9 billion, with an average purchase price of $62,500 per Bitcoin. In 2024 alone, the firm acquired 257,250 Bitcoin, marking its most significant buying spree to date.
Michael Saylor’s Strategy Pays Off
The company’s Bitcoin investment strategy, spearheaded by Executive Chairman Michael Saylor, has redefined corporate Bitcoin adoption. It has also driven a 13.2% increase in MicroStrategy shares on January 3, now priced at $339.60—a staggering 438% rise year-over-year.
Potential Risks and Rewards
While the perpetual preferred stock offering prioritizes holders in cases of bankruptcy or liquidation, MicroStrategy has cautioned that it may choose not to proceed with the offering depending on market conditions. This announcement caused a 0.19% dip in MSTR shares in after-hours trading.
With Bitcoin priced at $97,821, MicroStrategy’s strategy underscores its belief in the cryptocurrency’s long-term value. Whether this bold plan will further strengthen its market position remains to be seen.
