Technology company MicroStrategy announced an expanded issuance of its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC), raising up to $2 billion through an at-the-market offering dedicated to purchasing more Bitcoin (BTC). This follows a similar expansion in scope and significant Bitcoin acquisitions since launching STRC in July.
STRC, launched on July 22, is a flexible hybrid security pegged at $100 per share. Initially targeting a $500 million raise, the offering’s scale doubled just days after launch when MicroStrategy purchased over 21,000 BTC. A subsequent expansion brought the planned sale’s maximum to $4.2 billion.
The corporate security features a variable yield and no fixed maturity date, callable or redeemable by MicroStrategy under specific conditions, offering flexibility for both the company and investors.
MicroStrategy’s substantial accumulation of Bitcoin via debt, equity, and its innovative STRC security continues to provoke debate within the investment and crypto communities. Detractors view the company’s strateyg and projected Bitcoin profits as high-risk and potentially indicative of broader market bubbles. STRC investors, conversely, represent another avenue to indirectly gain exposure to the digital asset.
Piling Up Investor Lawsuits Against MicroStrategy
Despite its market capitalization growth and apparent success in driving up Bitcoin’s price, the company faces several lawsuits. Plaintiffs allege MicroStrategy misrepresented Bitcoin’s volatility risks and overstated projected profits.
Law firm representatives suggest these suits target alleged misstatements regarding profitability and risk, not their complete absence from disclosures. Plaintiffs also claim the company’s use of non-GAAP metrics, such as Bitcoin Yield and BTC specific Performance KPIs, obscures financial losses that would be apparent under standard accounting practices.
Company co-founder and chief evangelist Michael Saylor defends the enterprise model. During the latest earnings call, Saylor characterized MicroStrategy as likely misunderstood and undervalued, emphasizing its position at the intersection of emerging technology and asset innovation relative to persistent market confusion.
Related: Critical Mass: MicroStrategy’s Saylor Now Calls For Bitcoin ETF Ban