MicroStrategy will issue an additional $2 billion of perpetual special stock to continue buying BTC.

Self-proclaimed as a BTC development company, MicroStrategy announced that it will issue up to 2 billion US dollars of perpetual preferred stock to further strengthen its balance sheet and acquire more BTC.

MicroStrategy launches '21/21 Initiative'

MicroStrategy launched the '21/21 Plan' in October 2024, aiming to raise $42 billion within three years, including $21 billion in equity capital and $21 billion in fixed income capital. To accelerate the achievement of this goal, MicroStrategy announced the convening of a special shareholders meeting and proposed the issuance of new shares as follows:

To increase the authorized Class A shares from 330 million shares to 10.33 billion shares to support future fundraising

Increase the authorized preferred stock from 5 million shares to 1.005 billion shares to expand financing options.

MicroStrategy is the first to issue 'Perpetual Preferred Stock'

MicroStrategy announced yesterday that it will issue up to 2 billion US dollars of perpetual preferred stock, referred to as perpetual because it has no maturity date, and preferred stock typically has no voting rights, usually pays a fixed dividend, and has priority in liquidation.

MicroStrategy stated that its goal is to raise funds through the public offering of one or more perpetual preferred stocks, with the following functionalities:

Convertible to Class A common stock

Pay cash dividends

Allow share repurchase

The final terms of the perpetual preferred stock and the issuance price have not been determined. The purpose of this issuance is to enable MicroStrategy to continue to strengthen its balance sheet and acquire more BTC. The issuance is expected to take place in the first quarter of 2025, but MicroStrategy also reserves the right not to execute.

Why choose 'perpetual preferred stock'?

The characteristic of perpetual preferred stock is that they usually do not have voting rights, and will not have a significant impact on the governance of the company. After all, according to its provisional shareholders' meeting plan, the share capital of MicroStrategy will increase from the original 500 million shares to 11.5 billion shares, an increase of up to 2,200%.

However, for investors, buying preferred stocks enjoys fixed dividend distribution, and in the event of company liquidation, preferred stockholders will receive asset distribution before common stockholders. For companies like MicroStrategy that do not pay dividends, the recently issued convertible bonds also do not pay dividends. Permanent preferred stocks seem to be a good choice for investors seeking stable income.

This article MicroStrategy will issue 2 billion dollars of perpetual preferred stock to continue to buy BTC first appeared in Chain News ABMedia.