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Michael Saylor’s Strategy Unveils $21 Billion Stock Issuance For Bitcoin Investment

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Michael Saylor, co-founder and chairman of Strategy (formerly Microstrategy), is intensifying efforts to acquire Bitcoin (BTC) by tapping into capital markets, announcing plans to issue up to $21 billion in preferred stock. 

Strategy Plans Major Sale Of Preferred Shares

According to Bloomberg, the new offering will consist of 8% series A perpetual-strike preferred shares, which are convertible into class A common stock. The company plans to sell these shares through an “at the market offering” program, allowing for flexibility in timing and pricing. 

This approach builds on a previous successful effort in January, when Strategy raised $563 million by issuing preferred shares priced at $80 each, which were offered at a discount to their market value.

Preferred stocks are unique hybrid securities that combine features of both equity and debt, offering investors a fixed dividend while providing a claim on company assets. The favorable terms of the January deal reportedly attracted significant investor interest, contributing to a strong performance of the newly issued shares.

Since late October, Strategy has been actively acquiring Bitcoin, and the latest capital raise is part of a broader strategy to secure $42 billion over the next few years through various securities offerings. 

This includes a focus on selling fixed-income securities while managing common stock sales to fund additional BTC purchases. Currently, the firm holds approximately 499,096 Bitcoin, valued at around $42 billion.

Shares Drop 10% Amid Bitcoin Crash

Despite this purchase plan, Strategy reported that it did not purchase any Bitcoin between March 3 and March 9, according to a filing with the US Securities and Exchange Commission. 

This pause comes amid a fluctuating cryptocurrency market, where the market’s leading crypto, BTC, recently trades at $79,000 down 4.5% for the day and approximately 18% on the monthly time frame.

The preferred stock market has seen varied performance; while the shares climbed 18% from their initial pricing, they faced a decline of over 6% in a recent trading session as the supply increased. 

Despite this fluctuation, the preferred shares have outperformed common stock and Bitcoin over the same period, suggesting a robust demand from investors.

As seen in the daily chart below, shares of Strategy (MSTR), also experienced a drop of around 15% to $238 on Monday, reflecting broader market trends that have seen the company’s stock down approximately 10% this year. 

Bitcoin

In contrast, shares have surged over 2,200% since Saylor began investing in Bitcoin as an inflation hedge in 2020, while Bitcoin itself has risen over 600%.

The announcement of Strategy’s plans coincided with recent developments from the US government. President Donald Trump signed an executive order to create a strategic US Bitcoin reserve, which will be funded through cryptocurrencies forfeited in legal proceedings. 

Featured image from DALL-E, chart from TradingView.com 


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