MicroStrategy (MSTR) Stock Price Surges 13.22% as the Company Plans to Raise $2B Through a Public Offering of Perpetual Preferred Stock

This offering is part of the company's 21/21 Plan, which aims to raise about $42 billion within three years, including $21 billion in equity and $21 billion in debt.

MicroStrategy (NASDAQ:MSTR) stock price soared 13.22% on Friday after the company announced its intention to raise $2 billion through a public offering of perpetual preferred stock. This offering is part of the company’s 21/21 Plan, which aims to raise about $42 billion within three years, including $21 billion in equity and $21 billion in debt. These funds will be used to strengthen MSTR’s balance sheet and further increase its Bitcoin reserves.

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The perpetual preferred stock may offer features such as convertibility into common stock, cash dividends, and redemption provisions. Further, the offering is expected to occur in the first quarter of 2025.

MicroStrategy Gambles on Bitcoin: Bulls vs. Bears Clash

This capital raise reflects MicroStrategy’s commitment to keep increasing its Bitcoin holdings. As of January 4, MSTR held 446,400 Bitcoin, valued at nearly $43.9 billion. This significant Bitcoin investment has driven a huge increase in MSTR stock price, which has risen 468% in the past year.

It should be noted that the company’s Bitcoin acquisition strategy, led by CEO Michael Saylor, has received both praise and criticism from analysts.

According to the TipRanks Bulls and Bears tool, bullish analysts believe that MSTR’s large BTC investments make it an attractive option for investors looking to gain exposure to the cryptocurrency. Meanwhile, some analysts are concerned about the company’s substantial debt exposure and the potential impact of Bitcoin’s volatility on MSTR’s financial stability.

Is MSTR Stock a Good Buy?

Turning to Wall Street, MSTR stock has a Strong Buy consensus rating based on eight Buys assigned in the last three months. At $529.57, the average MicroStrategy price target implies a 55.91% upside potential.

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Disclosure: At the time of writing, Shrey Dua did not hold any direct or indirect positions in the mentioned securities.