MicroStrategy MSTR Continues Its Bitcoin Strategy with a New $563.4M Preferred Stock Offering

The company announced on Friday that it has priced 7,300,000 shares of 8.00% Series A Perpetual Strike Preferred Stock at $80.00 per share.

Tech company MicroStrategy MSTR is offering $563.4 million in preferred stock, a move that aligns with the company’s ongoing strategy of accumulating more Bitcoin BTC.

The company announced on Friday that it has priced 7,300,000 shares of 8.00% Series A Perpetual Strike Preferred Stock at $80.00 per share, with settlement expected on Feb. 5.

According to the press release, MicroStrategy intends to use the net proceeds “for general corporate purposes, including the acquisition of bitcoin and for working capital.”

This move comes as MicroStrategy continues to aggressively accumulate more Bitcoin. The company acquired an additional 10,107 Bitcoin this week, extending its buying spree to twelve consecutive weeks and bringing its total holdings to 471,107 BTC.

This latest purchase was made at an average cost of $105,596 per Bitcoin, adjusting the company’s overall cost basis to $64,511 per coin.

MicroStrategy's Bitcoin buying spree began in August 2020, when the company announced a purchase of 21,454 BTC. Since then, the company has continued to purchase Bitcoin in the open market, with an average purchase price of $29,861 per coin.

The company’s aggressive Bitcoin accumulation strategy has drawn both praise and scrutiny from analysts.

Mizuho recently initiated coverage on the company with an ‘outperform’ rating and a $515 price target, describing it as a “Lever for the Believer” in Bitcoin.

However, concerns persist about the sustainability of MicroStrategy’s premium valuation over its Bitcoin holdings.

The company’s shareholders recently approved a significant increase in authorized stock, potentially fueling further Bitcoin purchases.