Business intelligence company MicroStrategy announced the pricing of its Jan. 30 offering by selling 7.3 million shares of 8% Series A perpetual strike preferred stock, also known as STRK, at a public offering price of $80 per share. That's nearly threefold of the 2.5 million shares the company intended to offer.
MicroStrategy estimates the net proceeds from the offering will be $563.4 million. The company intends to use these proceeds for general corporate purposes, including acquiring more Bitcoin. As of Jan. 27, MicroStrategy held 471,107 BTC worth over $46 billion.
Perpetual preferred stock doesn’t have a maturity date or a mandatory redemption timeline; instead, it pays fixed dividends indefinitely as long as the issuing company remains operational.
The perpetual strike preferred stock will have a liquidation preference of $100 per share and will accumulate cumulative dividends at a fixed rate of 8% per annum. Regular quarterly dividends on perpetual strike preferred stock will be paid only if declared by MicroStrategy’s board. Payments may be in cash, Class A common stock or both at the company’s discretion.
Being able to convert into common shares provides these preferred stock investors with elements of volatility and optionality that they don't often see, Benchmark senior equity analyst Mark Palmer said earlier this month.
Mizuho Securities says bitcoin's price has room to run another 30% in the next three years and expects MicroStrategy's stock (MSTR) to benefit.
"We believe favorable market conditions put MSTR on a fast track to exceed targets (already raised $3bn/$18bn of debt/equity since October announcement)," Mizuho wrote to clients on Thursday in a note. They estimate MSTR bitcoin holdings of 783,000 at a $166,000 market price by the end of 2027, which implies a $130 billion value.
MicroStrategy's stock trades around $345 per share with a $85 billion market cap, according to The Block's MSTR price data. Shares are up about 15% over the past month and nearly 600% over the past year.
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