Saylor’s Latest Move: Issuing Preferred Stock to Finance Additional Bitcoin Buys

MicroStrategy Plans $500M Preferred Stock Offering to Fuel Bitcoin Purchases

MicroStrategy (MSTR), the largest corporate holder of Bitcoin, has announced plans to raise approximately $500 million through the issuance of Perpetual Strife Preferred Stock (STRF) to fund further Bitcoin acquisitions. However, signs suggest that investor enthusiasm for its capital-raising strategies may be waning.

According to an SEC filing, STRF will pay a fixed annual cash dividend of 10%, distributed quarterly. In cases of unpaid dividends, the rate will compound at an additional 1% per year (calculated quarterly), with a maximum cap of 18%. The first scheduled dividend payout is set for June 30, 2025.

This move follows MicroStrategy’s earlier preferred stock issuance (STRK), which initially offered an 8% interest rate. In contrast, the company’s previous convertible debt offerings came with minimal or zero interest rates. STRF shareholders will not receive voting rights but will have liquidation priority with a $100 per share preference. MicroStrategy retains the option to redeem shares if less than 25% of the original issuance remains or if specific tax-related conditions arise. Investors, meanwhile, can demand redemption in the event of a major corporate restructuring.

The new preferred stock is expected to trade on Nasdaq within 30 days of issuance, providing investors a way to gain exposure to Bitcoin while earning a high-yield return. Morgan Stanley, Barclays, Citigroup, and Moelis & Company are leading the offering under an SEC shelf registration.

Despite its aggressive Bitcoin accumulation strategy, MicroStrategy’s recent purchases have slowed. Last week, the company added just 130 BTC for $10.7 million, bringing its total holdings to 499,226 BTC.

MSTR shares fell 5% in early trading Tuesday, reflecting broader market weakness as Bitcoin dipped from $84,000 to $81,300.