MicroStrategy's Bitcoin Bet Pays Off: Stock Offering Oversubscribed 3x

MicroStrategy's Stock Offering Oversubscribed 3x as 'Bitcoin Effect' Continues

MicroStrategy, a leading software company, has successfully priced its offering of 7.3 million shares of 8.00% Series A Perpetual Strike Preferred at $80.00 per share. The issuance and sale of the preferred stock are scheduled to settle on February 5, 2025, subject to customary closing conditions.

The company estimates that the net proceeds from the offering will be approximately $563.4 million after deducting the underwriting discounts and commissions and the company’s offering expenses. MicroStrategy plans to use the net proceeds from the offering to acquire more Bitcoin and for other general corporate purposes.

This development is significant as it forms part of the software company’s plans to acquire more Bitcoin. The company has been a strong advocate for Bitcoin and has been actively acquiring the cryptocurrency for some time now. The oversubscription of the stock offering by a factor of 3x is a testament to the growing interest in Bitcoin and the 'Bitcoin Effect' that has been sweeping the market.

The preferred stock is structured with a settlement price of $100 per share, alongside an 8% annual dividend rate that can be paid in either cash or Class A common stock, convertible into common stock at an initial conversion price of $1,000 per share. The company has reserved the right to redeem all shares if the liquidation value drops below 25% of the total issuance.

The transaction is being underwritten by Barclays and Moelis & Company, and is expected to reach final settlement by February 5, 2025. As of January 2025, MicroStrategy holds approximately 190,000 bitcoins, and this financing may further increase its Bitcoin holdings.

This issuance is a significant step for MicroStrategy as it continues to expand its capital raising activities and invest in Bitcoin. The company's commitment to the cryptocurrency has been a key driver of its success in recent years, and this latest development is a further indication of its confidence in the future of Bitcoin.