MicroStrategy Plans $2B Preferred Stock Offering to Acquire More Bitcoin

MicroStrategy, the world’s largest corporate holder of Bitcoin, is considering a $2 billion raise through a perpetual preferred stock offering to fund its ongoing Bitcoin acquisition strategy. This move would further expand the company’s “21/21” plan, which aims to build a substantial Bitcoin reserve.

The offering, which could be executed through various mechanisms including converting MicroStrategy’s Class A common stock, paying a cash dividend, or redeeming shares, was outlined in a statement from the company on January 3. The funds raised would be used to strengthen the company’s balance sheet and acquire more Bitcoin, reinforcing its position as the largest corporate Bitcoin holder.

Market Conditions Could Impact the Offering

The decision to move forward with the offering is subject to market conditions. MicroStrategy clarified that it could choose not to proceed with the offering if the timing is not favorable. The company noted that the ultimate decision to finalize the offering is at its discretion and dependent on the prevailing market environment.

“If market conditions are not conducive, MicroStrategy may decide not to proceed with or complete the offering,” the company explained.

The perpetual preferred stock would be senior to MicroStrategy’s common stock, meaning holders of this stock would have priority in the event of liquidation or bankruptcy.

Expanding on the ‘21/21’ Strategy

This latest initiative is separate from MicroStrategy’s broader strategy to raise $21 billion through a combination of equity and fixed-income instruments. The company has already implemented a portion of this strategy through senior convertible notes and debt offerings to fund its ongoing Bitcoin purchasing spree.

MicroStrategy has amassed a substantial Bitcoin reserve, owning 446,400 Bitcoin, valued at $43.9 billion, according to Bitcoin Treasuries. In 2024, the company made its largest-ever Bitcoin purchase, acquiring 257,250 Bitcoin. The firm’s total Bitcoin holdings were bought at a dollar-cost average of $62,500, marking a 57.2% gain on its investment.

Michael Saylor’s Strategy Drives Growth

MicroStrategy’s Bitcoin investment strategy, led by Executive Chairman Michael Saylor, has positioned the company at the forefront of corporate Bitcoin adoption. Saylor has been instrumental in promoting Bitcoin as a key asset for corporations looking to diversify their balance sheets. This strategy has not only bolstered the company’s Bitcoin holdings but has also benefited its stock price.

On January 3, shares of MicroStrategy (MSTR) surged 13.2%, reaching $339.60. This represents a 438% increase from the same time last year, illustrating the positive impact that its Bitcoin strategy has had on investor sentiment.

Impact on MicroStrategy’s Stock

While MicroStrategy’s stock saw a significant jump on January 3, it experienced a slight decline of 0.19% in after-hours trading following the announcement of its potential perpetual preferred stock offering.

Despite this minor dip, MicroStrategy’s continued commitment to expanding its Bitcoin holdings has positioned it as a key player in the cryptocurrency space, attracting attention from both investors and the broader corporate sector.

As the company moves forward with its plans to raise additional funds, all eyes will be on the Bitcoin market and how it shapes the company’s next moves. MicroStrategy’s strategy of accumulating Bitcoin through both equity and debt instruments underscores its belief in the long-term value of the cryptocurrency, while its latest offering could provide the company with the resources to further solidify its position in the digital asset space.