MicroStrategy Plans $2 Billion Capital Raise Through Preferred Stock Offering

MicroStrategy plans to raise $2 billion by issuing perpetual preferred stock, announced on January 3. This method adds to its previous strategies for acquiring bitcoin (BTC) since becoming a treasury company in August 2020.

Perpetual preferred stock has no fixed maturity and offers fixed dividend payments without voting rights.
Shareholders are prioritized over common shareholders in liquidation but come after debt holders.
This instrument provides an indefinite call option and a lump-sum principal payment.
Benchmark predicts a mid-single-digit yield, appealing to institutions like pension funds.
The specific terms of the offering will be disclosed in Q1, likely including dividends and convertibility to class A common stock.
Benchmark maintains a buy rating on MicroStrategy's stock with a price target of $650.
MicroStrategy recently added 2,530 BTC, increasing total holdings to 450,000 BTC.
A Special Meeting for Shareholders is scheduled for January 21, where votes will be held on increasing authorized stock.
MSTR's Q4 earnings call is set for February 4.