According to Analysts, Institutions Are Poised for MicroStrategy’s Preferred Stock Sale.

MicroStrategy Launches Perpetual Preferred Stock Offering, Attracting Institutional Interest

MicroStrategy (MSTR), a trailblazer in innovative capital raising strategies to fund its significant Bitcoin (BTC) purchases, has introduced a new financial instrument this week—a perpetual preferred stock offering (STRK). Under the leadership of Executive Chairman Michael Saylor, the company continues to push boundaries in its pursuit of capital to acquire Bitcoin.

Preferred stock, which sits between equity and debt on a corporate balance sheet, offers investors the steady return of bonds while providing them with an ownership stake in the company.

Ben Werkman, a well-known MicroStrategy analyst, shared his thoughts on X about the unique appeal of preferred stock for institutional investors. He highlighted its lack of maturity risk, stable yield, and the potential for equity upside as key attractions.

“I could see a scenario where [preferred stock] starts replacing convertible bonds for fixed income accumulation, especially with no maturity risk involved,” Werkman stated. “Preferred stock could be far more accretive than any convertible bond offering and definitely more so than direct equity sales.”

Jeff Park, Head of Alpha Strategies at Bitwise Investments, also weighed in, calling MicroStrategy’s preferred stock offering one of the most attractive securities in the market and a next-generation investment tool.

“STRK is a near-perfect instrument,” Park said. “It gives you two potential upsides: First, if interest rates decline, the principal benefits, and second, if MicroStrategy’s value increases, investors can convert and own a higher volatility asset or simply liquidate.”

The BlackRock iShares Preferred and Income Securities ETF (PFF), the largest U.S. preferred stock ETF, holds approximately $15 billion in assets. Its largest investors include top corporations like Boeing (BA), Wells Fargo (WFC), and Citi Group (C).

MicroStrategy is set to finalize and announce the pricing details of its new preferred stock offering after the market closes on Thursday.