MicroStrategy Raises $563M for Bitcoin Buy

MicroStrategy, a leading business intelligence company, has successfully completed a significant capital raise by issuing preferred stock, with the primary intention of acquiring more Bitcoin. The company issued 7.3 million shares of Series A Perpetual Exchangeable Preferred Stock (STRK) at an issue price of $80 per share, generating net proceeds totaling $563.4 million.

The preferred stock is structured with a settlement price of $100 per share and an 8% annual dividend rate, payable in either cash or Class A common stock. The stock is convertible into common stock at an initial conversion price of $1,000 per share. MicroStrategy has emphasized that the capital raised will be directed toward general corporate commitments, with a prominent focus on purchasing additional Bitcoin.

Notably, if the liquidation value of the preferred stock falls below 25% of the total issuance, the company reserves the right to redeem all shares. This transaction was underwritten by Barclays and Moelis & Company and is expected to reach final settlement by February 5, 2025.

MicroStrategy's strategic move to raise capital through preferred stock issuance is a testament to the company's commitment to Bitcoin as a long-term investment and a store of value. The company's existing Bitcoin holdings, which currently stand at approximately 190,000 bitcoins, are expected to increase following this capital raise.