MicroStrategy Announces Proposed Offering of Series A Perpetual Strike Preferred Stock to Fund Bitcoin Acquisitions and Corporate Growth
MicroStrategy® Incorporated (Nasdaq: MSTR), a leading player in business intelligence and a major holder of bitcoin, has announced its intention to offer 2,500,000 shares of its Series A Perpetual Strike Preferred Stock in a public offering registered under the Securities Act of 1933. This move underscores the company’s commitment to leveraging its financial strategy to support both corporate growth and its ongoing acquisition of bitcoin.
Key Details of the Offering
The Series A Perpetual Strike Preferred Stock will have a liquidation preference of $100 per share, with cumulative dividends accumulating at a fixed rate that will be determined at the time of pricing. Dividends will be payable quarterly on March 31, June 30, September 30, and December 31, beginning March 31, 2025, subject to declaration by MicroStrategy’s board of directors. Notably, these dividends can be paid in cash, shares of MicroStrategy’s Class A common stock, or a combination of both, depending on the company’s discretion.
Holders of the perpetual strike preferred stock will also have the right to convert their shares into MicroStrategy’s Class A common stock under certain conditions and during specified periods, based on the applicable conversion rate. Additionally, MicroStrategy retains the option to redeem all outstanding shares of the perpetual strike preferred stock under specific circumstances, such as when the total aggregate liquidation preference falls below 25% of the initial issuance or in the event of certain tax-related occurrences.
In the case of a “fundamental change”—as defined in the certificate of designations governing the perpetual strike preferred stock—holders will have the right to require MicroStrategy to repurchase their shares at a price equal to the liquidation preference plus any accumulated and unpaid dividends.
Strategic Use of Proceeds
MicroStrategy plans to allocate the net proceeds from this offering for general corporate purposes, with a significant focus on acquiring more bitcoin and bolstering working capital. This aligns with the company’s long-standing strategy of using its treasury to accumulate bitcoin, which it views as a store of value and a hedge against inflation. By issuing preferred stock, MicroStrategy aims to strengthen its balance sheet while continuing to expand its bitcoin holdings—a move that has garnered significant attention from both investors and industry observers.
Market Leadership and Financial Innovation
This offering highlights MicroStrategy’s innovative approach to capital allocation and its ability to adapt to market conditions. The decision to issue perpetual strike preferred stock reflects the company’s confidence in its financial position and its ability to generate value for shareholders through strategic investments in bitcoin and other growth initiatives.
“By leveraging this financing vehicle, we are reinforcing our commitment to delivering value to our stakeholders while advancing our leadership in the digital asset space,” said Phong Le, CEO of MicroStrategy. “Our focus remains on driving innovation, enhancing shareholder returns, and positioning MicroStrategy as a pioneer in the integration of bitcoin into corporate treasury strategies.”
Underwriters and Offering Structure
The offering is being led by a team of prominent financial institutions, including:
- Barclays
- Moelis & Company LLC
- BTIG
- TD Cowen
- Keefe, Bruyette & Woods, A Stifel Company
Additionally, AmeriVet, Bancroft Capital, and The Benchmark Company are serving as co-managers. This robust syndicate underscores the strong institutional support for MicroStrategy’s financial strategy and its vision for the future.
The offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (SEC). Investors can access the preliminary prospectus supplement and accompanying prospectus electronically via the SEC’s website at www.sec.gov. Alternatively, interested parties can obtain copies by contacting the joint book-running managers directly.
Why This Matters for Investors
For investors, MicroStrategy’s proposed offering represents an opportunity to participate in the company’s ambitious growth strategy while gaining exposure to its innovative financial structure. The perpetual strike preferred stock provides a unique combination of stability, through its fixed dividend rate, and flexibility, given the potential for conversion into Class A common stock.
Moreover, the offering reinforces MicroStrategy’s reputation as a trailblazer in the intersection of traditional finance and digital assets. By raising capital to acquire bitcoin, the company continues to position itself as a leader in the emerging era of decentralized finance and blockchain technology.
As MicroStrategy moves forward with this offering, the company remains focused on executing its dual mandate of driving operational excellence and expanding its bitcoin treasury. With a clear strategy and strong institutional backing, MicroStrategy is well-positioned to capitalize on the growing adoption of bitcoin and its potential to reshape global financial systems.
This offering also serves as a testament to MicroStrategy’s ability to innovate within the capital markets, providing investors with new avenues to engage with the company’s long-term vision. As the offering progresses, stakeholders can expect further updates regarding pricing, dividend rates, and the final terms of the perpetual strike preferred stock.
