Michael Saylor's Strategy Intensifies Efforts to Buy Bitcoin (BTC) by Tapping into Capital Markets

Michael Saylor, co-founder and chairman of Strategy (formerly Microstrategy), is intensifying efforts to acquire Bitcoin (BTC) by tapping into capital markets

How Our News Is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad disclaimer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Michael Saylor, the co-founder and chairman of Strategy (formerly Microstrategy) (NASDAQ:MSTR), is known for his bold moves in the capital markets, and he’s planning another significant step: issuing up to $21 billion in preferred shares to continue the company’s massive bitcoin (BTC) accumulation.

Strategy Plans Major Sale Of Preferred Shares

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

This strategy builds on a previous success in January, when Strategy raised $563 million by issuing preferred shares priced at $80 each, which were sold at a discount to their market value. However, the shares were heavily traded, and the volume surged after reports that Strategy was planning to use the funds for bitcoin purchases.

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 in the event of liquidation. The preferred shares issued by Strategy in January come with favorable terms, including a high dividend yield and the potential for capital appreciation.

This capital has been instrumental in funding Strategy’s bitcoin acquisitions. Since late October, Strategy has been actively accumulating bitcoin, and the latest capital raise is part of a broader plan to secure $42 billion over the next few years through various securities offerings. This includes a focus on selling fixed-income securities and managing common stock sales to fund additional bitcoin purchases.

Currently, Strategy 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, is currently trading at $79,000 down 4.5% for the day and approximately 18% on the monthly time frame.

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

However, the preferred shares have outperformed common stock and bitcoin over the same period, suggesting a robust demand for these securities 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 decrease by approximately 10% this year.

In contrast, shares have surged more than 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 U.S. bitcoin reserve, which will be funded through cryptocurrencies forfeited in legal proceedings.