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MicroStrategy has raised $563 million through a stock offering to further expand its Bitcoin reserves. The sale of Perpetual Preferred Stock, a hybrid equity instrument with a fixed interest rate, generated more than twice the originally targeted $250 million. The company, led by Michael Saylor, remains aggressive in its Bitcoin investments, partly due to the pro-crypto stance of Donald Trump’s administration.
New Financing Strategy for Bitcoin Purchases
MicroStrategy offered Perpetual Preferred Stock at $80 per share, with a liquidation preference of $100 per share. This made the deal more attractive to investors than initially expected.
- The shares provide a fixed 8% interest rate.
- They include a conversion price of $1,000, meaning the stock would need to triple in value from Thursday’s closing price for conversion to be profitable.
This represents a new financing approach for MicroStrategy, which previously used convertible notes and stock sales to raise capital. The structure of this issuance appeals to a broader investor base, including those seeking relatively high yields.
According to filings with the Securities and Exchange Commission (SEC), the quarterly dividend payments will begin on March 31. Investors can receive their dividends in cash or shares.
MicroStrategy’s Long-Term Bet on Bitcoin
Since 2020, MicroStrategy has been consistently expanding its Bitcoin holdings, seeing it as a hedge against inflation and a superior alternative to cash.
- The company currently holds approximately $50 billion in Bitcoin, according to SaylorTracker.com.
- Michael Saylor has accelerated Bitcoin purchases in recent months, especially following Donald Trump’s re-election, as Trump is known for supporting digital assets and favoring relaxed crypto regulations.
Future Plans: More Capital Raising Ahead
MicroStrategy previously indicated plans to raise up to $2 billion through similar financing rounds in Q1 2025.
Since October 2024, the company has had a long-term plan to raise $42 billion via stock and bond issuances.
The transaction was led by Barclays, Moelis & Company LLC, BTIG, TD Cowen, and Keefe, Bruyette & Woods.
A Bold Bitcoin Strategy with High Stakes
With this latest capital injection, MicroStrategy continues to cement its position as the largest institutional Bitcoin holder. Whether this strategy will prove sustainable in the long run remains a subject of debate, but the company remains unwavering in its Bitcoin vision.
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