MicroStrategy Upsizes Stock Offering to $1 Billion for Bitcoin Investments

MicroStrategy, the Bitcoin treasury company, has announced a significant upsizing of its stock offering to $1 billion. This move is part of the company's strategy to fund its Bitcoin investments. The company plans to sell 11.76 million shares of its 10% Series A Perpetual Stride Preferred Stock (STRD) at $85 per share, expecting to raise approximately $979.7 million after fees and expenses. The sale is set to close on June 10.

STRD is the latest in a series of preferred stock offerings by MicroStrategy, following STRF and STRK. The new offering is designed to pay professional and institutional investors a 10% non-cumulative dividend. The company intends to use the net proceeds for "general corporate purposes, including the acquisition of Bitcoin and for working capital."

Michael Saylor, the co-founder and Executive Chairman of MicroStrategy, described STRD as a high-yield credit instrument. He highlighted that STRD has limited sensitivity to the price of Bitcoin and that investors in STRD rank behind STRF and STRK holders but ahead of common shareholders. Saylor views STRD as the fourth gear in the company's Bitcoin engine, aimed at generating BTC torque through strategic management of its at-the-money offering programs.

MicroStrategy currently holds 580,955 BTC, valued at over $60 billion, purchased at an average price of $70,023 per coin. This represents nearly 3% of Bitcoin's total 21 million supply. At the current price of $105,063 per Bitcoin, the $1 billion raised from the STRD offering would allow the company to purchase an additional 9,518 BTC, significantly more than its latest purchase of 705 Bitcoin for $75.1 million announced on June 2.

Saylor's strategy of accumulating Bitcoin has been a cornerstone of MicroStrategy's investment approach. Despite market volatility, Saylor remains optimistic about Bitcoin's long-term prospects, citing its potential as a store of value and a hedge against inflation. He has been a vocal advocate for Bitcoin, encouraging companies to adopt it as a reserve asset. This latest purchase of $1 billion in Bitcoin underscores Saylor's commitment to his strategy and his belief in Bitcoin's future.

The investment community has reacted with mixed sentiments to MicroStrategy's aggressive Bitcoin purchases. Some analysts praise Saylor's strategy, highlighting Bitcoin's potential for long-term appreciation. Others express concerns about the risks associated with investing in a volatile asset. However, Saylor remains steadfast in his belief that Bitcoin is the future of money and that companies should embrace it as a reserve asset.

Saylor's advocacy for Bitcoin has influenced the corporate world, with several companies following MicroStrategy's lead by adding Bitcoin to their treasury reserves. His latest Bitcoin purchase is a clear indication of his unwavering commitment to the cryptocurrency, despite market fluctuations. Saylor's strategy has positioned MicroStrategy as a leader in the corporate adoption of Bitcoin, and his latest move is a testament to his vision for the future of digital assets.