MicroStrategy Launches Public Offering of Series A Preferred Stock

Highlights:

• MicroStrategy has offered 2.5M shares of Series A preferred stock with a $100 liquidation preference and quarterly dividends. 
• The company will also have the right to redeem all of the preferred stock under certain conditions.
• The Stock offers cumulative dividends at a fixed rate, and the company can liquidate the shares early.

MicroStrategy revealed plans to issue a public offering of 2.5 million Series A Perpetual Strike Preferred Stock shares. The company will use proceeds obtained from the offering to obtain Bitcoin while funding operations and working capital needs. The $100 liquidation preference exists for each share with accumulation features for dividends. The first dividend payment under this program will occur on March 31, 2025.

JUST IN: 🇺🇸 MicroStrategy announces a new stock offering to buy more #Bitcoin pic.twitter.com/wodlHzaYt9

— Bitcoin Magazine (@BitcoinMagazine) January 27, 2025

The company declared it could distribute dividends either through cash payments, through common stock distributions, or both payment options. The offering seeks public registration under the Securities Act of 1933. Barclays, Moelis & Company LLC, BTIG, TD Cowen, and others are managing the offering.

Key Features of the Series A Preferred Stock

The Series A Preferred Stock offers cumulative dividends at a fixed rate, which will be decided during pricing. If the liquidation value of the shares drops below 25% of the original offering, MicroStrategy can redeem the shares early. There is also an early redemption option if certain tax events happen.

In certain cases, investors can convert preferred stock into common stock at a rate specified in the prospectus accompanying the offering. In cases of “fundamental changes,” MicroStrategy will repurchase the shares at their liquidation value, which also includes any unpaid dividends up to the repurchase date.

The company will also have the right to redeem all of the preferred stock under certain conditions. The total liquidation preference of the outstanding shares must be less than 25% of the initial offering. If this happens, MicroStrategy can redeem the stock for cash. This could also occur if a tax event takes place. In such cases, the redemption price will include the liquidation preference plus any unpaid dividends.

Bitcoin Accumulation Strategy Drives Interest

Meanwhile, MicroStrategy is expanding its Bitcoin holdings. The company has bought another 10,107 BTC in the week ending on January 26. It now holds a total of 471,107 BTC.

MicroStrategy has acquired 10,107 BTC for ~$1.1 billion at ~$105,596 per bitcoin and has achieved BTC Yield of 2.90% YTD 2025. As of 1/26/2025, we hodl 471,107 $BTC acquired for ~$30.4 billion at ~$64,511 per bitcoin. $MSTR https://t.co/UM5dGUS9Ma

— Michael Saylor⚡️ (@saylor) January 27, 2025

The company started aggressively buying Bitcoin in August 2020. The first purchase was 21,454 BTC, and they used corporate cash. Since then, MicroStrategy has used debt issuance to finance its Bitcoin purchases. The company has been consistently adding to its holdings for the past 12 weeks. MicroStrategy is still the largest corporate holder of Bitcoin in the world.

Shareholder Approval and Capital Raising Plans

Recently, the company’s shareholders approved a plan to increase the number of authorized Class A common shares. The authorized shares rose from 330 million to 10.3 billion. It allows the company to raise further capital in the future.

🚀 Big plans from @MicroStrategy!

The company aims to expand its authorized class A common stock from 330M to a staggering 10.3B shares to fuel its ambitious Bitcoin acquisition strategy.

Founder Michael Saylor, who controls ~47% of voting power, will lead the push for approval…

— Bitcoin.com News (@BTCTN) January 18, 2025

According to the sales agreement, MicroStrategy can sell common shares. The company sold 2.76 million shares between January 21 and January 26. That raised about $1.1 billion for Bitcoin purchases and other corporate needs.

According to this sales agreement, about $4.35 billion worth of shares remain available for future issuance. These shares can later be used by the company to buy more Bitcoin for itself. It also offers the ability to accommodate other corporate funding needs.