Strategy to Sell as Much as $21 Billion in Preferred Stock

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Strategy to Sell as Much as $21 Billion in Preferred Stock.

crypto :: 2025-03-11 :: source - bloomberg

By Bailey Lipschultz and Yiqin Shen

(Bloomberg) -- Michael Saylor is stepping up plans to tap capital markets to accelerate Strategy’s Bitcoin buying binge, saying the firm will issue up to $21 billion of preferred stock and use the proceeds to buy more of the cryptocurrency.

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The 8% series A perpetual-strike preferred shares, which are convertible into class A common stock, will be sold in an “at the market offering” program, the company said in a press release on Monday.

The sales of preferred stock— rare, debt-like securities — would build on a deal the company struck in January when it raised $563 million for the first time tapping such an instrument and doled out the shares at $80 apiece. The deal carried investor-friendly terms, dangling a sizable coupon on top of pricing the deal 20% below their marketed price, Bloomberg reported at the time.

The enterprise software company turned leveraged Bitcoin proxy controlled by co-founder and chairman Saylor has been buying Bitcoin on a frequent basis since late October. The preferred stock sale would add a lever for the company as it seeks to secure $42 billion over the next few years by selling securities to buy Bitcoin — with an increasing focus on its ability to sell fixed-income securities after flooding the market with common shares.

Strategy also said Monday that it didn’t buy any Bitcoin during the period from March 3 through March 9, according to a filing with the US Securities and Exchange Commission. The Tysons Corner, Virginia-based firm now owns about 499,096 Bitcoin, or about $42 billion worth.

Strategy’s announcement comes after US President Donald Trump signed an executive order late Thursday creating a strategic US Bitcoin reserve and a separate stockpile of other tokens, to be capitalized with crypto forfeited in legal proceedings. Saylor was among the industry officials who attended what the White House described as a roundtable gathering on the plan Friday.

The executive order authorized the Treasury and Commerce departments to develop “budget-neutral strategies” for buying more Bitcoin for the reserve with no incremental costs to taxpayers. The government will not acquire additional crypto for the separate stockpile of other digital assets beyond those obtained through forfeiture proceedings.

In the January offering, the stock has a conversion price of $1,000 — nearly 300% above its current levels. While the deal hit a bump in pricing, the units have performed well as retail investors snapped them up.

The preferred shares had climbed 18% from their $80 cost through Friday’s close before slumping more than 6% in Monday’s session as banks were able to add to the pool available for trading.

The preferred stock’s now 7% gain from a Jan. 31 close has outperformed a 23% dive for the common shares and a 20% drop for Bitcoin over the stretch.

Shares of Strategy have surged over 2,200% since Saylor began investing the company’s cash into Bitcoin as a hedge against inflation in 2020. Bitcoin is up over 600% during the same period.

The company later shifted to using equity and share sales to fund the purchases. Strategy unveiled a plan in October to raise $42 billion of capital through 2027 to fund Bitcoin purchases using at-the-market stock sales and fixed-income securities.

Hedge funds have been driving some of the demand for the convertible debt that’s been doled out in public offerings, as they seek out Strategy for trades that incorporate buying the bonds and selling the shares short, essentially betting on the underlying stock’s volatility.

Shares of Strategy fell around 10% to $257.87 on Monday, and are down a similar amount this year. Bitcoin fell 2.4% to $81,084, and is off around 14% since December.

(Updates throughout with context on the previous deal)