Shares of MicroStrategy (MSTR), a business intelligence company known for its Bitcoin (BTC-USD) holdings, were down 6% in the pre-market trading session. The decline came after the company disclosed an issuance of 7.3 million shares of 8.00% Series A Perpetual Strike Preferred Stock at $80 per share. Further, MSTR stock has dropped partly due to the decline in Bitcoin prices caused by Trump’s new tariff policies.
MSTR Aims to Increase Bitcoin Holdings
MSTR expects to raise about $563.4 million from the offering, which it plans to use for buying more Bitcoin and covering operating costs.
The issued preferred stock has a $100 per share liquidation preference. This means that if the company is liquidated, preferred stockholders will receive $100 per share before common shareholders get any payments.
This preferred stock offering aligns with MicroStrategy’s “21/21” plan to raise $42 billion over the next three years to expand its Bitcoin holdings. The plan involves raising $21 billion through equity and $21 billion through debt and other financial instruments. The goal is to use this capital to buy more Bitcoins.
Crypto Market Takes a Hit from Trump’s Tariffs
The cryptocurrency market witnessed a downturn following the announcement of new tariffs on imports from Mexico, Canada, and China. Bitcoin itself declined by 5% over the weekend, while the CoinDesk 20 index, which tracks the performance of the top 20 cryptocurrencies, dropped 3%.
The downside came after Trump’s decision to impose tariffs on imports from Mexico, Canada, and China sparked fears of a potential trade war, creating uncertainty in the global markets.
Is MSTR Stock a Good Buy?
Turning to Wall Street, MSTR stock has a Strong Buy consensus rating based on nine unanimous Buys assigned in the last three months. At $557.50, the average MicroStrategy price target implies a 66.52% upside potential. Shares of the company have gained 155.76% in the past six months.
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