#MSTR raises funds through a new stock offering.#
Hot Topic Overview
Overview
MicroStrategy plans to raise $2 billion through the issuance of perpetual preferred stock to further increase its Bitcoin holdings. The plan is expected to be detailed in the first quarter of 2025, with the perpetual preferred stock having no fixed maturity date and holders receiving fixed dividends but no voting rights. Benchmark analysts are optimistic about the plan, maintaining their buy rating on MSTR with a price target of $650. They believe the perpetual preferred stock offers a "unique proposition" to investors and argue that the plan could reduce MSTR's liquidity risk and strengthen its capital structure.
Ace Hot Topic Analysis
Analysis
MicroStrategy plans to raise $2 billion through the issuance of perpetual preferred stock to further increase its Bitcoin holdings. The plan is expected to be announced in the first quarter of 2025, with specific terms to be revealed at that time. Perpetual preferred stock has no fixed maturity date and holders receive a fixed dividend but have no voting rights. Benchmark analysts believe that perpetual preferred stock is an "interesting tool" as it offers investors a "unique proposition" through dividend payments and has a longer maturity than traditional convertible bonds (which mature in 4-8 years). Benchmark maintains a Buy rating on MSTR with a price target of $650 and believes the plan will make MSTR's capital structure less fragile and reduce liquidity risk. MicroStrategy currently holds 450,000 Bitcoin and is expected to vote on increasing the authorized number of preferred and common stock at a special shareholder meeting on January 21st.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
MSTR issues perpetual preferred stock to raise capital is a strategy to reduce liquidity risk and optimize capital structure.
Perpetual preferred stock has a longer duration and provides investors with more stable dividend income compared to traditional convertible bonds.
As the bond market is considered 'dead money' and 'bankrupt', perpetual preferred stock becomes a more attractive investment tool through dividend payments.
MSTR perpetual preferred stock provides investors with a unique proposition, Benchmark maintains a buy rating on MSTR with a price target of $650.