MicroStrategy Eyes $500M Preferred Stock Sale to Boost Bitcoin Holdings

MicroStrategy (MSTR), the largest corporate Bitcoin holder, is seeking to raise $500 million through a new issuance of Perpetual Strife Preferred Stock (STRF) to fund additional BTC acquisitions. However, investor appetite for its fundraising tactics appears to be cooling.

According to an SEC filing, STRF will offer a fixed 10% annual dividend, payable quarterly. If dividends go unpaid, they will compound at a rate of 1% per year (quarterly), up to a maximum of 18%. The first dividend payment is slated for June 30, 2025.

This follows MicroStrategy’s earlier preferred stock issuance (STRK), which debuted with an 8% interest rate. Previous fundraising rounds primarily involved convertible debt, often issued with little to no interest. Unlike common stock, STRF holders won’t have voting rights but will have a $100 per share liquidation preference. MicroStrategy retains the right to redeem the shares under specific conditions, such as if the outstanding share count drops below 25% of the original issuance.

The company expects STRF to trade on Nasdaq within 30 days of issuance, providing investors with Bitcoin exposure alongside a high-yield investment structure. Leading financial institutions, including Morgan Stanley, Barclays, Citigroup, and Moelis & Company, are managing the offering under an SEC shelf registration.

Despite MicroStrategy’s relentless Bitcoin accumulation over the past year, its recent purchases have slowed considerably. Last week, the firm acquired just 130 BTC for $10.7 million, bringing its total Bitcoin holdings to 499,226 BTC.

MSTR stock fell 5% in early Tuesday trading, mirroring broader market declines as Bitcoin slipped from $84,000 to $81,300.