MicroStrategy (MSTR) Opens New Front in Bitcoin (BTC) Capital Raising with Perpetual Preferred Stock Offering (STRK)

To say that MicroStrategy (MSTR) has been at the lead of creatively raising capital with which to buy massive amounts of bitcoin (BTC) would be an understatement.

Tech company MicroStrategy (MSTR) has made headlines once again with its perpetual preferred stock offering (STRK), which has attracted the attention of institutional investors and analysts alike.

As Executive Chairman Michael Saylor continues to lead the company's bitcoin (BTC) purchasing strategy, MicroStrategy's latest move has created a new avenue for capital accumulation.

According to Ben Werkman, a closely followed MicroStrategy analyst, preferred stock is attractive to institutions due to its lack of maturity risk, stable yield, and potential for equity upside.

"I could see a scenario where [the preferred stock] starts taking some of the convertible bond space for fixed income accumulation due to the lack of any point in time maturity risk," Werkman stated, adding that preferred stock "has the potential to be massively more accretive than any convertible offering has been and definitely more accretive than [share sales]."

Highlighting the offering's significance, Jeff Park, head of alpha strategies at Bitwise Investments, described MSTR's preferred stock as one of the most compelling securities in the market and a next-generation investment vehicle.

"STRK is a near-perfect instrument," Park wrote. "It gives you two chances to win: First, when rates go down, it's a huge boon to the principal, and two, if MicroStrategy goes up first, then you have a deep in-the-money (ITM) option to convert and own the higher volatility asset or just directly sell."

The offering comes as MicroStrategy, led by Saylor, has been aggressively purchasing bitcoin, using the proceeds from various capital raises to buy and hold the cryptocurrency.

The company's bitcoin purchasing strategy has drawn both praise and criticism, with some analysts questioning the sustainability of the move and others highlighting the potential upside if bitcoin continues to appreciate in value.

The largest of the U.S. preferred stock ETFs is the BlackRock iShares Preferred and Income Securities ETF (PFF), which has roughly $15 billion in assets under management.

The largest holders of PFF ETF are major corporations such as Boeing (BA), Wells Fargo (WFC), and Citi Group (C).

The final pricing terms of the new security are to be completed and announced after the market closes on Thursday.