MicroStrategy plans to issue perpetual preferred stock in Q1 2025, raising up to $2 billion to purchase more Bitcoin. As a result of this news, MicroStrategy’s stock price rose by 13.22% in a single day, reaching $339.66.
Background: MicroStrategy experienced a 44% decline from its peak. 10x Research: Leveraged Bitcoin narrative dissipates, three key factors determine BTC’s trend this year.
Context: MicroStrategy’s Bitcoin holdings, as the dominant player among U.S. listed companies, proposed the 21/21 plan at the end of October last year. The plan aims to raise $21 billion in equity financing over the next three years and issue $21 billion in fixed-income products (including debt, convertible notes, and preferred stock) for a total of $42 billion to purchase more Bitcoin.
MicroStrategy plans to issue preferred stock to raise $2 billion
Just yesterday (3rd), MicroStrategy announced the latest progress of its 21/21 plan. The company is currently planning to issue perpetual preferred stock through one or more public offerings, raising up to $2 billion.
These perpetual preferred stocks will have priority over Class A common stock and may have the following features:
Convertible into Class A common stock
Payment of cash dividends
Support for share redemption
MicroStrategy stated that the purpose of this issuance is to help the company continuously strengthen its balance sheet and purchase more Bitcoin. The issuance is expected to be implemented in Q1 2025.
However, MicroStrategy also added that whether or not this issuance plan will be initiated and completed will depend on market and other conditions. MicroStrategy may decide not to proceed or cancel this issuance. In addition, the issuance is expected to be registered through a submission of Form S-3 to the U.S. Securities and Exchange Commission (SEC), and the number of depositary shares represented by perpetual preferred stock, final terms, and issuance price have not yet been determined.
MicroStrategy holds over 446,400 Bitcoins
MicroStrategy has repeatedly raised cash through the sale of stocks and bonds to purchase Bitcoin. On Monday (30th), the company announced its purchase of Bitcoin again, using $209 million obtained from the sale of Class A common stock to buy 2,138 Bitcoins at an average price of approximately $97,837 per coin.
Currently, MicroStrategy holds a total of 446,400 Bitcoins, valued at approximately $43.84 billion, with an unrealized profit of up to $15.94 billion.
Stock price of MSTR rises over 13%
Possibly influenced by MicroStrategy’s continued fundraising for Bitcoin purchases, the company’s stock price rebounded after several days of decline. According to Google Finance data, MicroStrategy’s stock price rose by 13.22% in a single day, reaching $339.66.