Strategy (formerly MicroStrategy) raises $21 billion through new stock offering to buy more Bitcoin

Strategy, formerly MicroStrategy, is preparing to raise $21 billion through a new stock offering to support its business operations

MicroStrategy, the software company that pivoted to become a Bitcoin behemoth, is preparing to raise a whopping $21 billion through a new stock offering to support its business operations, including purchasing more of the digital asset, according to SEC filings on Thursday.

The company, formerly known as Strategy, plans to sell Class A Strike Preferred Stock (STRK), which will provide additional flexibility in raising funds following the recent decline in Bitcoin's price and broader economic uncertainties.

This initiative is spearheaded by the company's executive chairman, Michael Saylor, who has been a fervent believer in Bitcoin as a long-term asset despite recent market trends.

According to the filings, MicroStrategy aims to raise and invest a total of $42 billion in Bitcoin, an objective that the company is steadily approaching with each round of capital raising.

As of March 3, MicroStrategy held approximately 499,096 BTC, valued at over $41 billion at current market prices. The company acquired this massive Bitcoin stash at an average price of $66,357 per BTC, with most of the funding coming from equity sales.

The STRK offering introduces a new investment vehicle that gives MicroStrategy more flexibility in acquiring Bitcoin. Unlike traditional stocks or bonds, STRK is a perpetual preferred stock, meaning it does not have a maturity date or fixed redemption period.

Instead, investors receive a fixed 8% dividend indefinitely, as long as MicroStrategy remains operational. This makes STRK an attractive option for investors looking for a high and stable yield, especially in the current low-interest-rate environment.

However, recent market data shows that STRK declined by 2.1% last week, and no new buyers emerged for MicroStrategy's Class A common stock between March 3 and March 7.

This might indicate that the company will not be announcing a new Bitcoin purchase in the immediate term, as it usually does following a successful capital raising round.

Despite the recent decrease in price and the company's focus on selling preferred over common stock, MicroStrategy remains committed to its Bitcoin investment strategy, using capital raised through share sales to expand its BTC holdings.

This approach has made MicroStrategy the largest corporate holder of Bitcoin, positioning it as a key player in the cryptocurrency space.