MicroStrategy Ends Three-Month Bitcoin Purchase Streak Amid New Stock Offering

MicroStrategy (MSTR), a leading Bitcoin treasury firm, appended a week to its pause in buying the cryptocurrency on Monday, bringing a three-month streak to an end. Notably, the company did not acquire Bitcoin this week, concluding a sequence of consecutive weekly purchases that dated back to April 14.

The company, which has accumulated a treasury valued at nearly $65 billion in Bitcoin, disclosed in its most recent 8-K filing that it added nearly $7 billion worth of BTC during the first quarter of 2024.

Strategic Shift and Capital Raise

MicroStrategy Chairman and Co-founder Michael Saylor stated on X that the company needed to “HODL” (Hold On to Dollar) for some weeks.
In an unscheduled move on Sunday, the firm announced a new $4.2 billion at-the-market issuance of its STRD preferred stock offering.
Proceeds from this program, alongside previous STRD sales which generated nearly $1 billion in early June, will be used to continue acquiring Bitcoin.

Saylor previously characterized the STRD preferred stock, issued at a $108,110 per share floor, as the company’s “fourth gear,” designed to provide investors with attractive yields less sensitive to Bitcoin’s price fluctuations.

“STRD is long-duration, high-yield, over-collateralized preferred stock,” according to an investor presentation, targeting “yield-focused” investors. STRD provides regular dividends and prioritized repayment in liquidation.

MicroStrategy maintains a portfolio of three preferred stock series (STRD, STRK, and STRF), each with distinct characteristics. Sales revenue, significantly boosted by STRD note maturities like the recent $1 billion event, directly funds the company’s Bitcoin purchasing program.

Position and Profitability

With nearly 600,000 BTC in its possession (roughly 2.8% of the total Bitcoin supply), MicroStrategy reported a substantial $14.05 billion unrealized gain from Bitcoin appreciation for the quarter.

The company stated that Bitcoin’s price dipped 0.7% on Monday to reach $108,110, although it had increased approximately 2.3% over the preceding month. Stock in MicroStrategy mirrored this trend slightly, trading down around 0.75% to $400.96 by late Monday, while posting a nearly 39% year-to-date gain.