MSTR's latest BTC purchase offers insight into its evolving funding model
MicroStrategy is increasingly using preferred stock to fund Bitcoin purchases, shifting away from common stock sales.Summary
MicroStrategy (MSTR) recently made its fifth-largest Bitcoin acquisition, purchasing 22,337 BTC, primarily funded by a $1.18 billion issuance of its perpetual preferred stock (STRC), equivalent to about 16,800 BTC. This marks a significant shift, as STRC issuance far surpassed the $396 million raised through its common stock at-the-market (ATM) program, which was historically the main funding source. The high dividend rate on STRC has pushed MSTR's total annual dividend obligations above $1 billion, though the company holds $2.25 billion in USD reserves for these payments. Given the significant drop in common stock value, MSTR appears incentivized to rely less on common stock dilution, using it selectively only when its multiple to net asset value (mNAV) is high or for building USD reserves. Furthermore, STRC is showing signs of pricing pressure, trading below par, which could lead the company to increase the dividend by 25 basis points.
(Source：CoinDesk)