Microstrategy prepares for next Bitcoin expansion with new funding

Microstrategy has unveiled plans to issue preferred shares to facilitate Bitcoin acquisitions, solidifying its aggressive digital asset investment strategy following a $1.1 billion BTC purchase.

Microstrategy prepares for next Bitcoin expansion with new funding

Microstrategy gets new funding to keep pushing its Bitcoin-buying machine
Software intelligence company Microstrategy Inc. (NASDAQ: MSTR) announced Monday that it plans to issue 2,500,000 shares of Series A perpetual income preferred stock through a public offering. The offering has been registered under the Securities Act of 1933 and is subject to market conditions and is intended to support the company's strategic objectives. According to the announcement:

Microstrategy intends to use the net proceeds from the offering for general corporate purposes, including bitcoin acquisitions and working capital.

The Series A Perpetual Income Preferred Stock will have a liquidation preference of $100 per share and will pay a fixed-rate dividend quarterly beginning March 31, 2025. Shareholders will have the right to convert their shares into Class A common stock under certain conditions, and Microstrategy reserves the right to redeem the shares in certain circumstances, such as tax events or if the liquidation preference on outstanding shares falls below 25% of the initial offering. Barclays, Moelis & Company LLC, BTIG, TD Cowen, and Keefe, Bruyette & Woods are acting as joint book-running managers for the offering, while AmeriVet, Bancroft Capital and The Benchmark Company are acting as co-managers.

The announcement comes after Microstrategy acquired 10,107 bitcoins for a total of $1.1 billion, bringing its total bitcoin holdings to 471,107 BTC at an average price of $64,511 per bitcoin. According to the SEC filing, the purchase was funded by raising $1.1 billion in net proceeds from the sale of 2.76 million Class A common shares between January 21 and January 26.

Microstrategy recently released its ambitious "21/21 Plan" to raise $42 billion over three years to buy more BTC. The plan includes raising $21 billion in equity and $21 billion in fixed-income securities. This bold strategy aligns with Executive Chairman Michael Saylor's vision of Bitcoin as a store of value and a hedge against inflation, further solidifying Microstrategy's position as a leader in digital asset investing. He predicts that Bitcoin could reach $13 million by 2045.