MicroStrategy’s perpetual convertible oversubscribed by nearly 3X after Saylor’s Forbes magazine cover

MicroStrategy Inc. (MSTR) has seen an oversubscription of its latest perpetual convertible preferred stock offering, with subscriptions rising from 2.5 million shares to 7.3 million shares, priced at $80 each. 

The update follows a Forbes feature on the company and its co-founder, Michael Saylor, published on Thursday.

According to a Fidelity Investments alert, MicroStrategy initially sought to raise $250M from its perpetual strike preferred stock offering. However, the equity has seen a massive spike in demand. 

With its new amped up shares, the American business intelligence firm could now raise $584M to fuel its continued Bitcoin acquisition strategy. 

MicroStrategy’s ambitious fundraising plans to buy Bitcoin

The Virginia-based software company first revealed its plans on January 3 to raise up to $2 billion over the next few years through its perpetual preferred stock offerings. This came as part of the company’s larger “21/21 plan.” 

The initiative aims to raise $21B in equity and an additional $21B in fixed-income instruments between 2025 and 2027. 

On January 27, 2025, the company launched its “Series A Perpetual Strike Preferred Stock” (STRK) offering. Initially, MicroStrategy intended to offer 2.5M shares at a liquidation preference of $100, equating to a total value of $250M, which could be used to buy more Bitcoin.

However, the offering has far exceeded expectations, prompting the firm to add the offered shares by up to three times its initial level to over 7 million shares. However,  the pricing is 20% less than it had announced in early January.

STRK, MicroStrategy’s preferred equity, is seen as a compelling investment due to several distinctive features that set it apart from typical preferred stocks. One of its most attractive features is its fixed 8% yield. It offers investors a stable return with no risk of a call option—an element that typically limits the upside in traditional preferred equities.

Moreover, according to Bitwise’s Head of Alpha Strategies, Jeff Park, the equity comes with a conversion feature. The feature allows it to be converted into one-tenth of a share of MSTR stock at a conversion price of $1,000.

In addition, it provides holders with an opportunity to benefit from potential future stock appreciation.

MicroStrategy’s unorthodox capital strategy now includes preferred equity: $STRK. It’s a bold play for the holy grail: to harness $MSTR volatility w/o dilution. Whether it succeeds depends on time horizon.

Here’s my theory—and why I’m bullish on STRK (hint: it’s less about BTC): pic.twitter.com/QxMibvKAtA

— Jeff Park (@dgt10011) January 28, 2025

STRK is expected to be listed on the Nasdaq stock exchange, and allocations to investors who pledged to buy them will take place at 5:00 AM GMT.   

Forbes feature calls MicroStrategy a ‘revolution to corporate finance’

MicroStrategy, led by executive chairman Michael Saylor, is now the largest corporate holder of Bitcoin, with a total of 471,107 BTC. The company is behind only the mysterious Satoshi Nakamoto, the pseudonymous creator of Bitcoin. 

In its January 30 Digital Assets feature, Forbes called the company’s strategic bet on Bitcoin a “blueprint for manipulating traditional finance to harness the pixie dust fueling crypto mania.”

In the past year, MicroStrategy’s stock has soared by over 560%, even as skeptics question the logic behind the company’s high market cap of $84.88B. This is despite holding just $48 billion in actual Bitcoin assets.

The company’s rise coincided with the end of 2024 surge in Bitcoin’s value, which broke through $100,000 in Dec. MicroStrategy and Saylor’s vested interest and investments in the crypto pushed its MSTR equity prices to record highs.

The FOMO fueled its addition to the tech-oriented Nasdaq 100 stock market on Dec 23, per a Reuters report.

Saylor told Forbes that most of the American firm’s profits and trading volumes, which rivals the big tech startups like Amazon, Tesla, Microsoft, Alphabet and Meta, all lies on one aspect of the Bitcoin market: volatility.

“It’s because we put a crypto reactor in the middle of the company, pull capital in and then we spin it. That puts volatility in the equity, and that makes our options and convertible bonds the most interesting and highest-performing in the market,” Saylor explained.

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