Software firm turned serial Bitcoin (BTC) acquirer MicroStrategy (MSTR) has announced a new $2 billion capital raise.
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The company, led by technology entrepreneur Michael Saylor, is raising the money through perpetual preferred stock, which is a new approach for MicroStrategy. Until now, the company has used cash on hand and at-the-market (ATM) offerings to raise needed money.
A perpetual preferred stock usually has no fixed maturity date and continues indefinitely unless the company chooses to redeem it or put a maturity date on it. Shareholders of the stock receive fixed dividend payments but have no voting rights. In the event of a liquidation, perpetual preferred stockholders are paid before common shareholders.
Buying More BTC
Although the exact details of the perpetual preferred stock have yet to be announced, MicroStrategy said the offering will likely take place in this year’s first quarter. MicroStrategy is almost certain to buy more Bitcoin with the money raised.
As recently as January 13, MicroStrategy purchased an additional 2,530 BTC, taking its total holdings of the largest cryptocurrency by market capitalization to 450,000 Bitcoin. MicroStrategy is now the largest corporate owner of Bitcoin in the world and its holdings are presently worth $45 billion.
MSTR stock has risen 648% in the last 12 months.
Is MSTR Stock a Buy?
The stock of MicroStrategy has a consensus Strong Buy rating among eight Wall Street analysts. That rating is based on eight Buy recommendations issued in the past three months. The average MSTR price target of $529.57 implies 46.85% upside from current levels.
