MicroStrategy’s Massive Bitcoin Investment
MicroStrategy, a publicly-traded U.S. software company, has been making waves in the crypto world with its massive investment in Bitcoin. With over 471,107 BTC on its balance sheet, MicroStrategy is now the largest corporate holder of the number-one cryptocurrency. This puts them in the same league as Binance, U.S. spot Bitcoin ETFs, and even Satoshi Nakamoto himself.
Series A Perpetual Preferred Stock Offering
To fund its aggressive Bitcoin acquisition strategy, MicroStrategy has announced the sale of 7.3 million shares of its 8.00% Series A perpetual preferred stock. This offering is expected to generate around $563 million, providing MicroStrategy with a significant war chest to pursue its goals. The preferred stock offering is set to settle on February 5, according to a recent press release.
Price Target of $49 Million per Bitcoin
Michael Saylor, former CEO of MicroStrategy and a vocal Bitcoin advocate, has confidently predicted a price target of $49 million per Bitcoin in his 21-year outlook for the cryptocurrency. This projection is based on an annual growth rate of 37%, which Saylor believes is achievable given Bitcoin’s historical performance. Despite the bullish sentiment surrounding Bitcoin, Saylor’s bold price target sets him apart from other Bitcoin bulls.
MicroStrategy’s decision to use the proceeds from the preferred stock offering to buy more Bitcoin is a clear indication of the company’s confidence in the asset’s long-term potential and value growth.
Details of the Preferred Stock Offering
The perpetual preferred stock offered by MicroStrategy will have a liquidation preference of $100 per share and will accumulate cumulative dividends at a fixed rate of 8.00% per annum. Holders of the perpetual preferred stock will also have the option to convert their shares into MicroStrategy’s class A common stock at an initial conversion rate of 0.1000 shares per share.
The offering is being managed by a syndicate of banks, including Barclays, Moelis & Company LLC, BTIG, TD Cowen, and Keefe, Bruyette & Woods. Interestingly, none of these banks currently hold any Bitcoin as a balance sheet asset.
