MicroStrategy’s Strategic Play: Offering $250M Preferred Stock to Boost Bitcoin Holdings

MicroStrategy, the company synonymous with corporate Bitcoin accumulation, is making another significant move. Under the leadership of Executive Chairman Michael Saylor, the firm is seeking to raise a substantial sum specifically to acquire more Bitcoin, further cementing its position as the largest corporate holder of the digital asset. This latest fundraising effort introduces a new financial instrument to their well-established strategy.

MicroStrategy’s New Preferred Stock Offering

Strategy, formerly known as MicroStrategy, announced plans to raise $250 million through an initial public offering (IPO) of a new class of perpetual preferred stock. This offering is designed to provide additional capital for the company’s ongoing Bitcoin acquisition strategy.

The company intends to issue 2.5 million shares of its 10% Series A Perpetual Stride Preferred Stock, which will trade under the ticker STRD. Each share is priced at $100. This type of stock is called ‘perpetual’ because it does not have a set maturity date, meaning the company is not obligated to redeem it at a future point.

Funding More Bitcoin Purchases with STRD

The primary stated purpose for the net proceeds from this preferred stock offering is to acquire additional Bitcoin (BTC). A portion of the funds will also be allocated for general corporate purposes and working capital.

This move adds a new method to MicroStrategy’s fundraising toolkit, which has historically relied on issuing common stock and convertible senior notes to finance its Bitcoin purchases. Perpetual preferred stock typically offers fixed dividends and holds a higher claim on a company’s assets and earnings compared to common stock.

Based on current market prices, a $250 million raise could potentially allow MicroStrategy to purchase an estimated 2,350 additional Bitcoin, further expanding its already massive holdings.

Michael Saylor’s Vision and the Impact

Michael Saylor, the executive chairman and co-founder, has been the driving force behind MicroStrategy’s aggressive Bitcoin investment strategy. His conviction in Bitcoin as a store of value and a hedge against inflation has guided the company’s financial decisions since 2020.

MicroStrategy currently holds an impressive 580,955 Bitcoin on its balance sheet, valued at over $61.7 billion. This makes them the world’s largest publicly traded corporate holder of Bitcoin, possessing more than double the combined holdings of the next 117 public companies that hold BTC.

This new offering underscores Saylor’s continued commitment to accumulating Bitcoin and finding diverse ways to fund this strategy.

Preferred Stock Details for Crypto Investors

The 10% Series A Perpetual Stride Preferred Stock (STRD) is primarily targeted at institutional investors and select non-institutional investors. It’s important for potential investors to understand the specifics of this offering:

• **Dividends:** Holders are eligible for a 10% annual dividend, payable in cash. However, dividends are only paid if and when declared by Strategy’s board of directors or an authorized committee.
• **Non-Cumulative:** The dividends are non-cumulative. This means if the company’s board does not declare a dividend for a specific period, that unpaid amount does not accrue or carry over to future periods.
• **Payment Schedule:** If declared, dividends would be paid quarterly, typically on the last day of each financial quarter, starting September 30, 2025.
• **Liquidation Preference:** In the event of liquidation, STRD holders have priority over common stockholders and are entitled to a $100 per share liquidation preference plus any declared but unpaid dividends.

The offering also includes provisions for Strategy to redeem shares under certain conditions (e.g., if less than 25% of the original shares remain outstanding) and for holders to require repurchase in case of a ‘fundamental change’ event.

The Broader Crypto Investment Picture

This preferred stock offering by MicroStrategy highlights the evolving landscape of corporate crypto investment. Companies are exploring various financial instruments to gain exposure to Bitcoin, reflecting growing mainstream acceptance and strategic integration of digital assets into corporate balance sheets.

The sale is being managed by prominent Wall Street banks, including Barclays, Morgan Stanley, Moelis & Company, and TD Securities, with support from several investment firms. The offering is being conducted under a registration statement filed with the U.S. Securities and Exchange Commission (SEC).

Summary

MicroStrategy’s decision to issue $250 million in perpetual preferred stock marks another significant step in its ongoing mission to acquire Bitcoin. This innovative fundraising approach provides the company with additional capital to expand its leading position in corporate Bitcoin holdings, driven by Michael Saylor’s long-term vision for the digital asset. While offering potential returns, the preferred stock comes with specific terms, including non-guaranteed, non-cumulative dividends, making it a unique option within the crypto investment space.