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- MicroStrategy plans to raise $2 billion by issuing perpetual preferred stock and expanding its Bitcoin-focused investment strategy.
- The company continues aggressive Bitcoin purchases while anticipating regulatory shifts under the new U.S. administration.
MicroStrategy has expanded its bond offering strategy by introducing perpetual preferred stock, which will raise $2 billion this quarter. The initiative is part of the company’s “21/21” plan to generate $42 billion through equity and fixed-income securities.
The company intends to secure funds via one or more public underwritten offerings of perpetual preferred stock, which will hold seniority over its Class A common stock. Unlike traditional stock, perpetual preferred stock lacks a maturity date or mandatory redemption schedule, offering fixed dividends indefinitely as long as the issuing company remains in operation.
Market Conditions and Timing in MicroStrategy’s Securities Issuance
At an investor meeting on January 13, MicroStrategy co-founder and executive chairman Michael Saylor emphasized that issuing perpetual preferred stock aligns with the company’s strategy of providing investors with leveraged exposure to Bitcoin, reported CNF. He stated that the company aims to offer returns and volatility at 1.5 times the levels of Bitcoin.
Saylor noted that the timing and amount of securities issued and Bitcoin purchases would be guided by both structured and opportunistic decision-making. According to a research note from Benchmark analyst Mark Palmer, the company is evaluating market conditions to determine the best approach.
Palmer suggested that any preferred stock issued would likely feature convertibility into common shares, allowing investors access to both uncommon volatility and optionality in typical preferred stock investments. These securities would effectively provide an indefinite embedded call option on a company whose valuation is closely tied to Bitcoin.
MicroStrategy’s View on Crypto Policies
During the investor meeting, Saylor also discussed potential regulatory shifts, indicating that President-elect Donald Trump and his cabinet nominees appear ideologically aligned with cryptocurrency. He predicted the possible repeal of Staff Accounting Bulletin 121 (SAB 121), a regulation requiring firms that custody cryptocurrencies to record customer holdings as liabilities. Although lawmakers previously voted to repeal the bulletin, President Joe Biden later vetoed it.
When asked about the prospect of a U.S. strategic Bitcoin reserve, Saylor refrained from making a definitive prediction, stating that political factors would determine its feasibility. He noted that discussions around such a reserve marked a significant shift from past debates on whether the government might consider banning Bitcoin altogether.
MicroStrategy Expands Bitcoin Holdings
MicroStrategy remains committed to its aggressive Bitcoin acquisition strategy. In a recent update, we covered the company’s announcement of purchasing an additional 2,530 BTC for approximately $243 million at an average price of $95,972 per Bitcoin. This marks the 10th consecutive week of bitcoin purchases, bringing its total holdings to 450,000 BTC, valued at over $40 billion.
Benchmark maintains a “buy” rating on MicroStrategy stock (MSTR) with a price target of $650. The stock, which outperformed bitcoin in 2024, was trading at $357.75 per share at the time of publication, reflecting a 4.5% increase.
Industry experts, including Bitwise CIO Matt Hougan, view corporate Bitcoin acquisition strategies as a significant factor influencing the cryptocurrency market. Hougan described this trend as an overlooked yet impactful development that could drive further market growth in the coming year.
