Strategy (Nasdaq: MSTR; STRK) has announced plans to offer 5,000,000 shares of its Series A Perpetual Strife Preferred Stock.

The planned public securities offering will be registered under the Securities Act of 1933 and depends on market conditions. Strategy will utilize proceeds from this offering to fund general corporate activities such as Bitcoin acquisition and operational capital.

MicroStrategy (Nasdaq:MSTR) has announced plans for a public offering of 5,000,000 shares of its Series A Perpetual Strife Preferred Stock.

This offering will be registered under the Securities Act of 1933 and is subject to approval by the SEC and market conditions.

The company plans to use the net proceeds from the offering to fund general corporate activities, which may include Bitcoin acquisition and operational capital.

Each share of Series A Perpetual Strife Preferred Stock will generate 10.00% annual dividends based on the stated stock value. The company will commence making quarterly dividend payments in cash on June 30, 2025. Unpaid dividends will accrue at a rate of 10% per year and in the aggregate at the rate of 18%.

The company possesses the exclusive right to redeem any outstanding shares of the perpetual strife preferred stock at a price of $100.00 per issued share plus declared but unpaid dividends. The perpetual strife preferred stock can only be redeemed when less than 25% of the issued shares remain outstanding or during specific tax-related events.

Furthermore, the preferred stock holders have the right to force Strategy to repurchase their shares when fundamental changes occur, such as a merger, consolidation or liquidation.

This preferred stock has a specific liquidation value of $100 per issued share. However, the preferred stock trading price will determine the daily adjustment of this liquidation preference. The adjustment liquidation preference will be determined by the highest value of these three values: the stated value at $100 per share, the last reported sale price and the average of the last reported sale price in the last ten trading days.

Strategy aims to utilize these proceeds to fund its Bitcoin acquisition strategy. This strategic move showcases the company’s long-term commitment to Bitcoin as a core asset and store of value. Additionally, the offering provides investors with an opportunity to earn a stable income from dividends.

Morgan Stanley & Co. LLC, Barclays Capital Inc., Citigroup Global Markets Inc. and Moelis & Company LLC will serve as joint book-running managers for the offering.

The company previously filed a shelf registration statement with the Securities and Exchange Commission, which allows businesses to proceed with the offering through a prospectus supplement framework.

Strategy’s issuance of preferred shares helps the company to reinforce its capital structure and maintain its strategic flexibility for future decisions. The preferred stock option allows the company to operate independently to continue its Bitcoin-oriented mission.

This move may also impact how the company handles takeover defenses as preferred shareholders could obtain extra rights which will further complicate acquisitions.