MicroStrategy's Strike Preferred Stock Offering Fuels Bitcoin Acquisition Plans: Details

The business intelligence and Bitcoin-focused company MicroStrategy Incorporated MSTR shares are trading lower on Monday.

The company disclosed plans to offer 2.5 million shares of its Series A Perpetual Strike Preferred Stock in a public offering.

The company expects to use proceeds for general corporate purposes, including bitcoin acquisitions and working capital.

MicroStrategy’s perpetual strike preferred stock carries a $100 per share liquidation preference and will accrue fixed-rate cumulative dividends, set at pricing.

The company stated that declared dividends on the perpetual strike preferred stock will be payable quarterly starting March 31, 2025, in cash, Class A common stock, or a mix of both.

Holders of MicroStrategy’s perpetual strike preferred stock can convert their shares into Class A common stock under specific conditions and during designated periods.

Also, MicroStrategy may redeem all outstanding shares for cash if the total liquidation preference falls below 25% of the initial issuance or if certain tax events occur.

The redemption price will equal the liquidation preference plus any unpaid dividends, or, in the case of a tax-related redemption, the greater of the liquidation preference or the five-day average trading price before the redemption notice.

Last week, the company announced its plan to redeem its $1.05 billion convertible senior notes due 2027 and settle all conversion requests in shares of its Class A common stock.

Investors can gain exposure to the stock via ETF Opportunities Trust T-Rex 2X Long MSTR Daily Target ETF MSTU and First Trust SkyBridge Crypto Industry and Digital Economy ETF CRPT.

Price Action: MSTR shares are down 0.66% at $351.38 at the last check Monday.

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