MicroStrategy to Issue More Perpetual Preferred Stock

Strategy, formerly known as MicroStrategy, plans to issue additional perpetual preferred stock to temper volatility in its common shares, CEO Phong Le said in a recent interview. The company’s common stock, trading under the ticker MSTR, has fallen nearly 17% year to date amid a pullback in Bitcoin’s price.

The preferred shares, branded Stretch, carry a variable dividend currently set at 11.25% with the rate reset monthly to encourage trading near the $100 par value. Preferreds have so far been a small part of the company’s capital raising—about $370 million in common stock and roughly $7 million in perpetual preferreds funded the last three weekly Bitcoin purchases—but Strategy plans to shift more toward preferred capital as liquidity has been high.

Strategy continues to expand its Bitcoin holdings, reporting 714,644 BTC and purchasing more than 1,000 BTC earlier this week. With Bitcoin trading around $67,422 versus an average purchase price near $76,056, the firm shows an unrealized loss of roughly $6.1 billion.

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