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MicroStrategy Launches New Preferred Stock "Stretch" to Raise $2.8B for Bitcoin Stash
ByAinvest
Saturday, Jul 26, 2025 5:56 pm ET2min read
Strategy (MSTR) has launched a new preferred stock called "Stretch" to raise $2.8 billion for its Bitcoin holdings. The shares offer a 9% annual payout and no maturity date, and were sold at a discount to attract buyers. This is the latest move by Michael Saylor to raise funds for Bitcoin purchases, which have fueled a 158% stock price increase over the past year. Analysts are bullish on MSTR, with a Strong Buy consensus rating and a street-high price target of $680.
MicroStrategy Inc. (NASDAQ: MSTR) has launched a new preferred stock offering, "Stretch," to raise $2.8 billion for its Bitcoin holdings. The offering, priced at $90 per share, is part of CEO Michael Saylor's aggressive strategy to accumulate digital assets. The preferred stock, with no maturity date, offers a 9% annual payout and was sold at a discount to attract buyers [1].The offering includes 28,011,111 shares of Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), generating net proceeds of approximately $2.474 billion after underwriting fees. This expansion from a previously announced $2 billion raise reflects heightened investor appetite and MicroStrategy’s intent to deepen its Bitcoin holdings, which now exceed 214,000 BTC [2].
The proceeds will primarily be allocated to Bitcoin acquisitions and working capital, further entrenching the asset as a core component of MicroStrategy’s portfolio. The offering, managed by joint book-running underwriters including Morgan Stanley and Barclays, is structured to settle on July 29, 2025 [3].
Analysts are bullish on MSTR, with a Strong Buy consensus rating and a street-high price target of $680. The company's stock price has increased by 158% over the past year, driven by its Bitcoin strategy. However, critics argue that holding a substantial portion of corporate assets in a highly volatile asset class could compromise financial flexibility if prices reverse [4].
The offering also includes redemption rights, allowing MicroStrategy to repurchase shares at $101 plus accrued dividends under specific conditions, including tax-related events or fundamental corporate changes [5]. The company’s strategy has redefined its corporate identity, transforming the software firm into a dual-exposure entity with significant Bitcoin holdings.
The capital raise highlights shifting dynamics in corporate Bitcoin adoption. By leveraging preferred stock structures, MicroStrategy has attracted institutional investors seeking yield and exposure to digital assets. The firm’s success hinges on sustained Bitcoin price momentum and broader institutional acceptance. While Saylor remains bullish, the company’s strategy contrasts with more conservative approaches adopted by other firms, which prioritize diversification and risk mitigation [6].
Historical correlations between MicroStrategy’s Bitcoin purchases and price spikes suggest its buying power exerts upward pressure on the asset. With over 600,000 BTC under its control, the company’s demand for Bitcoin has created a feedback loop that reinforces its market presence [7]. Regulatory watchers have observed the firm’s approach as a potential precedent for corporate governance models, though no direct legal challenges have emerged. Competitors are reportedly exploring similar strategies, signaling a possible expansion of Bitcoin’s role in corporate balance sheets [8].
References:
[1] https://www.ainvest.com/news/bitcoin-news-today-microstrategy-raises-2-8b-preferred-stock-offering-bolster-bitcoin-holdings-2507/
[2] https://www.ainvest.com/news/bitcoin-news-today-microstrategy-raises-2-8b-preferred-stock-offering-bolster-bitcoin-holdings-2507/
[3] https://www.ainvest.com/news/bitcoin-news-today-microstrategy-raises-2-8b-preferred-stock-offering-bolster-bitcoin-holdings-2507/
[4] https://www.ainvest.com/news/bitcoin-news-today-microstrategy-raises-2-8b-preferred-stock-offering-bolster-bitcoin-holdings-2507/
[5] https://www.ainvest.com/news/bitcoin-news-today-microstrategy-raises-2-8b-preferred-stock-offering-bolster-bitcoin-holdings-2507/
[6] https://www.ainvest.com/news/bitcoin-news-today-microstrategy-raises-2-8b-preferred-stock-offering-bolster-bitcoin-holdings-2507/
[7] https://www.ainvest.com/news/bitcoin-news-today-microstrategy-raises-2-8b-preferred-stock-offering-bolster-bitcoin-holdings-2507/
[8] https://www.ainvest.com/news/bitcoin-news-today-microstrategy-raises-2-8b-preferred-stock-offering-bolster-bitcoin-holdings-2507/
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