MicroStrategy has announced plans to raise additional funds to expand its Bitcoin holdings through a public offering of Strike Preferred Stock (STRK), according to a Jan. 27 statement.

The company aims to issue 2.5 million shares of its Series A Perpetual Strike Preferred Stock, subject to regulatory approval and prevailing market conditions.

The offering’s proceeds will support corporate operations, including Bitcoin acquisitions and working capital.

Each share carries a $100 liquidation preference and will accumulate fixed-rate dividends, payable quarterly, beginning March 31, 2025. The Payments may be made in cash, Class A common stock, or a combination of both.

Shareholders of the preferred stock can convert their holdings into Class A common stock under specific conditions.

The Michael Saylor-led firm also reserves the right to redeem shares if the liquidation preference drops below 25% of the initial issue or if certain tax-related scenarios arise.

Redemption prices will factor in any unpaid dividends or, for tax-driven redemptions, the greater of the liquidation preference or a calculated average trading price.

This approach offers investors opportunities tied to Bitcoin’s growth while allowing MicroStrategy to strengthen its treasury assets.

Bitcoin analyst Dylan LeClair described the offering as a sophisticated financial tool combining an 8% dividend yield with a 10:1 conversion ratio and a $1,000 strike price.

He added that the stock effectively functions as a perpetual call option, providing investors with regular dividends without a maturity date.

Recent developments

MicroStrategy’s latest stock offering follows its decision to redeem a $1.05 billion tranche of 2027 convertible senior notes.

According to the firm, investors can redeem the notes at face value or convert them to Class A stock by Feb. 24, 2025, at a

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Author: Oluwapelumi Adejumo