Michael Saylor’s Strategy, which was formerly known as MicroStrategy has put out a $250 million in perpetual preferred stock issue to fuel more Bitcoin purchase. This move puts the company forward as the world’s largest corporate holder of Bitcoin and a pioneer in hybrid financial engineering.
Backed by the major investment banks and aim to attract both institutional and crypto savvy investors this strategic initiative which puts forth perpetual preferred stock as a unique capital raising vehicle.
Wall Street Backs Bold Bitcoin Bet
The new Series A Stride perpetual preferred stock offers a 10% annual dividend, paid out quarterly in cash subject to board approval. We have priced in a $100 liquidation preference and made this a cumulative which presents as a flexible, perpetual solution.
Importantly the liquidation value is a dynamic measure which includes recent trade performance. This in turn protects investors and allows the company to fund Bitcoin purchases without going to great lengths to dilute equity.
Perpetual Preferred Stock Fuels Treasury Growth
Proceeds from the perpetual preferred stock will see us buy out 2,352 BTC. With Bitcoin trading near $106,000, Strategy’s Bitcoin treasury is projected to grow beyond 580,955 BTC, already valued at over $61 billion.
Saylor had been into aggressive acquisition of assets via convertible notes and common stock in the past. This time he is introducing a novel fixed income crypto play which gives instant liquidity without the loss of long term control.
Perpetual Preferred Stock: A Diverse Yield Appeal
Yield starved investors find the 10% dividend to be a market beating return. This as better than JPMorgan’s 6.5% preferred rate which also throws in some indirect Bitcoin growth.
The perpetual preferred stock takes seniority over common shares and may include features which tie in to Bitcoin price performance. Also with the underwriting of Barclays and Morgan Stanley we see high institutional credibility despite the crypto exposure.
Institutional Appetite Signals Broader Crypto Shift
MSTR shares went up 1.4% post announcement which is a sign of market approval in the face of recent crypto volatility. Also this may put other companies like Tesla and Square to think about the same perpetual preferred stock issues.
STRD is also transforming beyondStrategy’s balance sheet. It adds structured buying pressure to Bitcoin markets and may act as a blueprint for crypto-integrated corporate finance. Also at 67% of all public company Bitcoin held by Strategy which they have put forward as a benchmark in treasury innovation.
