MicroStrategy Announces 21 Billion Magnesium Preferred Stock Plan, STRK Plunges 8%

Self-proclaimed Bitcoin Development Corporation Strategy ( formerly known as Micro Strategy, MicroStrategy) announced that it has signed a sales agreement to issue and sell its 8% Series A perpetual preferred stock to raise up to $21 billion. Strategy intends to use the proceeds for general corporate purposes, including the acquisition of Bitcoin.

Strategy's additional new shares are limited and preferred shares are issued instead

Under its "21/21 Plan", which aims to add $42 billion in capital over the next three years ( from October 30, 2024 ) including $21 billion in equity and $21 billion in fixed-income securities, this plan will further support its acquisition of Bitcoin as part of its reserve asset strategy.

Strategy has issued 16.7 billion shares, 8.2 billion convertible bonds, and nearly 600 million preferred shares ( MicroStrategy classifies it ) fixed income.

8% dividend distribution in ( is also issued at a 20% discount! Is MicroStrategy Perpetual Preferred Stock STRK Tempting? )

In fact, Strategy could once again become the largest convertible bond issuer in 2025. Year-to-date, its share of the U.S. convertible bond market has reached 30%. Today, it seems that Strategy wants to use preferred stock to cover the remaining fixed income amount.

STRK is about to distribute interest rates, selling pressure poured in, fell 8%

Since STRK is first subscribed by institutional investors and then traded on the secondary market, Strategy issued nearly 600 million preferred shares for the first time at the end of January, with an issue price of $80, and the price of the secondary market rose from $85 all the way, compared with generally illiquid preferred stocks, its trading volume and performance are quite good ( I believe that the discount issuance is also one of the important reasons ).

However, STRK, a preferred stock that has always been less volatile, fell more than 8% after yesterday's news, reflecting selling pressure caused by $21 billion in new issuance.

STRK's first distribution, about $1.24 per share. The payment date is March 31, 2025, and the shareholder registration deadline ( the base date ) which is March 15, 2025. At the cost of yesterday's closing price of $84.8, the yield (Effective Yield) is about 9.4%.

( MicroStrategy Perpetual Preferred Shares Will Distribute Dividends, STRK Can Be Used for Bitcoin Hedging? )

The article MicroStrategy announced plans for 21 billion magnesium preferred shares, STRK plunged 8% and first appeared in Chain News ABMedia.