MicroStrategy announced that it plans to raise funds through a public offer of Strike Preferred Stocks (STRK) to increase its Bitcoin holdings, according to a statement released on Jan. 27, 2019.
Under the current market and regulatory conditions, the company plans to sell 2.5 million Series A Perpetual-Strike Preferred Shares.
The offering’s proceeds will support corporate operations, including Bitcoin acquisitions and working capital.
Each share will accrue fixed rate dividends and be payable every quarter, starting March 31, 2025. The payment can be done in either cash or Class A common stocks, but not both.
Certain conditions apply to the conversion of preferred stock into Class A Common Stock by shareholders.
Michael Saylor’s company reserves the rights to redeem any shares it has issued if its liquidation preference falls below 25% or in certain situations involving taxes.
For tax-driven redemptions the redemption price will include any dividends that have not been paid or the higher of the calculated average trading prices or the liquidation preferences.
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.
The stock, he said, functions like a perpetual option that pays regular dividends to investors without any maturity dates.
Recent developments
MicroStrategy’s latest stock offering follows its decision to redeem a $1.05 billion tranche of 2027 convertible senior notes.
Investors can convert the Class A shares to their face value by February 24, 2025 at an approximate $142 conversion price per share.
Before that, shareholders of the Bitcoin-focused company approved measures to boost the company’s authorized Class A shares from 330 million to 10.3 billion. The preferred stock was also increased to one billion shares from the previous 5 million.
These efforts are designed to bolster the company’s financial flexibility to acquire more of the flagship digital asset. MicroStrategy holds the most BTC of any corporate entity, with 471107 BTC valued at almost $50 billion.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
