MicroStrategy Plans 5 Million Share Offering for Bitcoin Purchase

MicroStrategy Incorporated, a leading business intelligence company, has announced its intention to offer 5 million shares of its Series A Perpetual Strike Preferred Stock in a public offering. The proceeds from this stock sale will be used for general corporate purposes, with a significant portion earmarked for the purchase of Bitcoin. This move underscores MicroStrategy’s commitment to Bitcoin as a primary asset and a long-term store of value.

The Series A Perpetual Strike Preferred Stock comes with several key features designed to attract investors. It offers a fixed dividend rate of 10.00% per annum on the stated amount, providing a predictable income stream. Dividends will be paid quarterly in arrears, starting from June 30, 2025, and will be compounded at an increasing rate if unpaid. The stock also includes redemption rights for MicroStrategy and repurchase rights for holders in the event of a fundamental change. The initial liquidation preference is set at $100 per share, adjusted based on the trading price of the preferred stock.

This offering is part of MicroStrategy’s broader capital structure, which includes Class A common stock, Class B common stock, and preferred stock. The Board of Directors has the authority to issue up to 5 million shares of “blank check” preferred stock, allowing the company to adapt to market conditions and seize strategic opportunities, such as acquiring more Bitcoin. The issuance of preferred stock could impact takeover attempts by giving preferred shareholders additional rights, potentially complicating acquisitions or increasing their costs. This move reinforces MicroStrategy’s autonomy and ensures that strategic decisions remain aligned with its long-term Bitcoin-focused vision.

MicroStrategy’s Bitcoin investment strategy has garnered mixed reactions from analysts. Some view the company as well-positioned to benefit from growing Bitcoin adoption, with Michael Saylor, the Chairman, suggesting that Bitcoin could become the primary treasury reserve asset for corporations worldwide. However, others caution about the risks of tying a company’s fortunes to a volatile asset. Despite these concerns, MicroStrategy’s actions demonstrate a strong conviction in Bitcoin’s potential as a store of value.

As a Delaware corporation, MicroStrategy benefits from a well-established business-friendly legal framework. The Delaware General Corporation Law Section 203 applies to business combinations with interested stockholders, providing additional legal protections. The company’s bylaws also designate the Court of Chancery of the State of Delaware as the exclusive forum for derivative actions or breaches of fiduciary duties, further enhancing its legal standing.

The offering is being managed by Morgan Stanley & Co. LLC, Barclays Capital Inc., Citigroup Global Markets Inc., and Moelis & Company LLC as joint book-running managers. The offering is part of an effective shelf registration statement filed with the SEC, and potential investors can access an electronic version of the preliminary prospectus supplement and related prospectus on the SEC’s website. This move by MicroStrategy not only highlights its commitment to Bitcoin but also its strategic approach to capital raising and corporate governance.