Strategy Announces $21 Billion STRK At-The-Market Program

Rhea-AI Summary

Strategy (MSTR) has announced a significant $21 billion At-The-Market (ATM) Program for its 8.00% series A perpetual strike preferred stock. The program allows the company to sell shares of preferred stock that are convertible into class A common stock.

The company plans to implement sales in a disciplined manner over an extended period, considering trading price and volume conditions. The net proceeds will be used for general corporate purposes, including bitcoin acquisition and working capital.

The ATM offering is being made through a prospectus supplement filed on March 10, 2025, under an automatic shelf registration statement that became effective on January 27, 2025.

Positive

• Substantial $21 billion capital raising potential through ATM Program
• 8.00% dividend yield on preferred stock offering
• Flexible implementation allowing disciplined sales based on market conditions
• Proceeds to strengthen bitcoin acquisition capability

Negative

• Potential dilution for existing shareholders upon preferred stock conversion
• Large offering size may pressure stock price
• Additional dividend payment obligations from preferred stock issuance

Insights

Financial Analyst

Strategy's announcement of a $21 billion ATM offering of convertible preferred stock represents a massive capital raising initiative that significantly expands their bitcoin acquisition capability. The 8.00% series A perpetual strike preferred stock is convertible into class A common shares, creating a flexible funding mechanism that allows Strategy to raise capital over an extended period based on market conditions.

The sheer scale of this offering is remarkable - at $21 billion, it represents approximately 26.5% of Strategy's current $79.2 billion market capitalization. This suggests an extremely aggressive expansion of their bitcoin treasury strategy, far beyond incremental additions.

The structured approach of executing sales in a "disciplined manner over an extended period" indicates management's awareness of potential market impact and dilution concerns. The 8.00% dividend yield creates a substantial ongoing obligation, requiring Strategy to generate significant returns from bitcoin appreciation to offset this cost.

This financing vehicle allows Strategy to potentially acquire billions in additional bitcoin without taking on debt, though the preferred shares represent a senior claim on assets relative to common shareholders. The convertible nature creates potential future dilution if/when holders convert to common shares.

This move solidifies Strategy's position as the largest corporate holder of bitcoin and demonstrates management's continued conviction in bitcoin as a store of value despite the ongoing volatility in cryptocurrency markets.

Investment Strategist

This ATM program represents a significant strategic evolution in Strategy's capital formation approach. Rather than traditional debt offerings or direct common stock issuance, the company has created a hybrid security that optimizes for flexible, opportunistic capital raising while maintaining a predictable dividend structure.

The $21 billion ceiling suggests management anticipates substantial bitcoin acquisition opportunities ahead. By establishing this program now, Strategy positions itself to quickly capitalize on potential price declines in bitcoin without announcing each capital raise separately, which has historically created predictable market reactions.

The 8.00% dividend rate sits between typical corporate debt costs and equity returns, reflecting the hybrid nature of the security. This represents a premium over treasury yields but below typical equity return requirements - a reasonable cost given bitcoin's historical volatility and return profile.

The disciplined, extended timeline for implementation indicates a sophisticated approach to managing the potential market impact. By telegraphing intent but retaining flexibility on timing and amounts, Strategy can opportunistically raise capital when their stock trades favorably.

For investors, this creates a clear framework for understanding Strategy's continued bitcoin accumulation without the uncertainty of how future purchases would be financed. The convertible nature provides a natural hedge - if bitcoin appreciates significantly, conversion becomes more likely but would occur against a backdrop of increasing asset value.

TYSONS CORNER, Va.--(BUSINESS WIRE)-- Strategy™ (Nasdaq: MSTR; STRK) today announced that it has entered into a sales agreement pursuant to which Strategy may issue and sell shares of its 8.00% series A perpetual strike preferred stock, $0.001 par value per share (the “perpetual strike preferred stock”), having an aggregate offering price of up to $21.0 billion (the “ATM Program”). Shares of the perpetual strike preferred stock are convertible by the holders into shares of Strategy’s class A common stock.

Strategy expects to make sales of perpetual strike preferred stock pursuant to the ATM Program in a disciplined manner over an extended period, taking into account the trading price and trading volumes of the perpetual strike preferred stock at the time of sale.

Strategy intends to use the net proceeds from the ATM Program for general corporate purposes, including the acquisition of bitcoin and for working capital.

The perpetual strike preferred stock, subject to the terms and conditions of the Sales Agreement, may be sold by agents by any method that is deemed an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended or any other method permitted by law, which may include negotiated transactions or block trades.

The sale of perpetual strike preferred stock under the ATM Program is only offered pursuant to a prospectus supplement, filed with the Securities and Exchange Commission on March 10, 2025 under the existing automatic shelf registration statement, which became effective on January 27, 2025 (File No. 333-284510), and the base prospectus contained therein.

This press release shall not constitute an offer to sell, or a solicitation of an offer to buy, perpetual strike preferred stock, nor shall there be any sale of perpetual strike preferred stock in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About Strategy

MicroStrategy Incorporated d/b/a Strategy (Nasdaq: MSTR; STRK) is the world’s first and largest Bitcoin Treasury Company. We are a publicly traded company that has adopted Bitcoin as our primary treasury reserve asset. By using proceeds from equity and debt financings, as well as cash flows from our operations, we strategically accumulate Bitcoin and advocate for its role as digital capital. Our treasury strategy is designed to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed-income instruments. In addition, we provide industry-leading AI-powered enterprise analytics software, advancing our vision of Intelligence Everywhere. We leverage our development capabilities to explore innovation in Bitcoin applications, integrating analytics expertise with our commitment to digital asset growth. We believe our combination of operational excellence, strategic Bitcoin reserve, and focus on technological innovation positions us as a leader in both the digital asset and enterprise analytics sectors, offering a unique opportunity for long-term value creation.

Strategy, MicroStrategy, and Intelligence Everywhere are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.

Forward-Looking Statements

Statements in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to the at-the-market offering of the perpetual strike preferred stock. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the uncertainties related to the sales made pursuant to the offering program, if any, market conditions and the other factors discussed in the “Risk Factors” section of Strategy’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 18, 2025 and the risks described in other filings that Strategy may make with the Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and Strategy specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250310264418/en/

Strategy

Shirish Jajodia

Corporate Treasurer

ir@strategy.com

Source: Strategy

FAQ

What is the size of Strategy's (MSTR) new ATM Program announced in 2025?

Strategy announced a $21 billion At-The-Market Program for its 8.00% series A perpetual strike preferred stock.

How will Strategy (MSTR) use the proceeds from the $21B ATM offering?

The net proceeds will be used for general corporate purposes, including bitcoin acquisition and working capital.

When did Strategy's (MSTR) shelf registration for the ATM Program become effective?

The automatic shelf registration statement became effective on January 27, 2025.

What type of shares is Strategy (MSTR) offering in its ATM Program?

Strategy is offering 8.00% series A perpetual strike preferred stock, which is convertible into class A common stock.

How will Strategy (MSTR) implement the $21B ATM stock sales?

Sales will be conducted in a disciplined manner over an extended period, considering trading price and volume conditions.