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.
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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.
