MicroStrategy's $584M Bitcoin Bet: Saylor Upsizes Preferred Stock Offering

MicroStrategy, a software intelligence company, has announced plans to raise $584 million through a perpetual preferred stock offering. The company, led by Michael Saylor, aims to use the funds to acquire more Bitcoin (BTC), further expanding its cryptocurrency holdings.

The offering involves the sale of 7.3 million shares of 8% Series A perpetual strike preferred stock, also known as STRK. The shares will be priced at $80 each, with the company estimating net proceeds of $563.4 million. These funds will be used for general corporate purposes, including the acquisition of Bitcoin and working capital.

Saylor, the company's founder and Executive Chairman, revealed on Twitter that the perpetual preferred stock deal had been upsized from an initial target of $250 million to $584 million. The new pricing increases the dividend yield to 10%, which is expected to boost investor demand. The perpetual strike preferred stock does not have a maturity date and will pay fixed dividends indefinitely. The offering will have a liquidation value of $100 per share, with MicroStrategy having the right to redeem the stock in cash at its discretion.

MicroStrategy has been actively acquiring Bitcoin since August 2020, when it purchased 21,454 BTC using corporate cash. The company has since adopted an aggressive Bitcoin accumulation strategy, with shareholders voting last week to increase the number of authorized Class A common shares by 30x. This move aims to provide more funds for Bitcoin purchases by increasing the number of shares available for sale.

As of now, MicroStrategy holds 471,107 BTC, worth approximately $49.4 billion at the current price. The company has unrealized gains of more than $19 billion on its Bitcoin holdings. Saylor, an avid Bitcoin supporter, has developed a unique financial metric called BTC Yield to assess the company's Bitcoin acquisition strategy. He has previously predicted that Bitcoin's price could reach over $1 million in the next 21 years.