MicroStrategy Inc. is offering investors a new form of preferred stock with an eye-catching 10% dividend—higher than the yield on a similar preferred deal the company completed in January. Unlike the previous offering, this perpetual preferred stock has no conversion price, marking another unconventional move for the company, which has aggressively issued financial instruments to raise capital for Bitcoin purchases.
A Strategic Shift in Fundraising
The deal, expected to be priced later this week, is being marketed by debt bankers at Morgan Stanley, Barclays Plc, Citigroup Inc., and Moelis & Co. This represents a shift from the traditional convertible bonds MicroStrategy previously issued—raising over $10 billion in the past year—as well as the preferred stock offering handled through equity capital markets desks in January.
This pivot highlights a change in the company’s target audience. While its convertible debt deals primarily attracted hedge funds looking to profit from stock volatility, this latest offering is being aimed at investors more familiar with trading fixed-income securities. Retail investors are expected to be a key focus.
Aggressive Bitcoin Accumulation Strategy
MicroStrategy’s preferred shares—traded under the ticker STRK—allow the company to generate cash through an at-the-market (ATM) program. Last week, it raised $10.7 million through these sales to acquire roughly 130 Bitcoin, reinforcing its strategy of using capital markets to expand its Bitcoin holdings.
The company has ambitious plans to raise $42 billion over the coming years by issuing securities to fuel further Bitcoin acquisitions. With its market already saturated with common stock offerings, MicroStrategy is increasingly turning to fixed-income instruments to sustain its purchasing spree.
Market Performance and Bitcoin Correlation
Since late October, MicroStrategy has aggressively expanded its Bitcoin portfolio, which is now valued at approximately $42 billion. However, the company’s shares have fallen 25% since President Donald Trump’s inauguration, underperforming Bitcoin’s 19% decline in the same period.
Despite the recent slump, MicroStrategy stock remains up more than 2,000% since CEO Michael Saylor began reallocating corporate cash into Bitcoin as an inflation hedge in 2020. Over the same period, Bitcoin itself has surged more than 600%.
While issuing notes incrementally may help the company sustain its Bitcoin accumulation strategy, larger deals or a significant rally in Bitcoin and MicroStrategy’s stock may be necessary to maintain momentum.
Related Topics:
