MicroStrategy Expands Bond Offering

Corporate bitcoin holder MicroStrategy has broadened its bond offering by venturing into the perpetual preferred stock market. The company aims to raise up to $2 billion this quarter through the issuance of preferred stock as part of its “21/21” plan, targeting a total of $42 billion in equity and fixed-income securities.

The plan involves multiple public underwritten offerings of perpetual preferred stock, which will rank senior to MicroStrategy’s Class A common stock. Notably, perpetual preferred stock lacks a maturity date or a mandatory redemption timeline, providing fixed dividends indefinitely—as long as the company remains operational.

During a Benchmark-hosted investor meeting in Orlando on Jan. 13, Michael Saylor, co-founder and executive chairman of MicroStrategy, stated that the potential issuance of perpetual preferred stock represents a new means to offer investors leveraged exposure to bitcoin. He commented on the company’s intent to provide investors with “both returns and volatility at factors of 1.5x those of bitcoin itself.”

Saylor highlighted that MicroStrategy’s decisions on timing and amounts for securities issuance and bitcoin purchases are based on programmatic and opportunistic strategies, reflecting the unique “moods” of bitcoin and capital markets. Mark Palmer, a Benchmark equity analyst, noted that potential preferred stock offerings would likely include convertibility into common shares, granting investors elements of volatility and optionality.

Views on Trump

In addition to corporate strategies, Saylor expressed favorable views on President-elect Donald Trump and his cabinet nominees, citing alignment with cryptocurrency ideologies. He also mentioned the controversial Staff Accounting Bulletin 121 (SAB 121), which mandates firms to record customer cryptocurrency holdings as liabilities. Saylor speculated it could be repealed in the Trump Administration’s first week.

Palmer reported that the establishment of a U.S. strategic bitcoin reserve remains politically contingent, yet noteworthy—occurring just 48 months after discussions on potentially banning bitcoin. Benchmark maintains a “buy” rating on MSTR stock, with a price target of $650. At the time of publication, MSTR stock was priced at $357.75, having outperformed bitcoin in 2024.

Additionally, MicroStrategy announced the purchase of 2,530 BTC for approximately $243 million, at an average price of $95,972 per bitcoin, marking the 10th consecutive week of bitcoin acquisitions. The company’s total holdings now amount to 450,000 BTC, valued at over $40 billion.

Bitwise CIO Matt Hougan noted that corporate bitcoin acquisition strategies are an “overlooked megatrend” poised to significantly elevate the market this year.