MicroStrategy Raises $563.4 Million Through Preferred Stock Offering
MicroStrategy has raised $563.4 million through a preferred stock offering priced at $80 per share, with an 8% coupon and a liquidation value of $100. The company continues to accumulate Bitcoin, with a recent purchase of 10,107 BTC, bringing its holdings to 471,107 BTC valued at $49.4 billion. MicroStrategy and Coinbase are challenging a proposed 15% tax on unrealized gains, which could result in billions of dollars in taxes on their BTC holdings without converting them to dollars.
A Strategic Fundraising for Further BTC Accumulation
MicroStrategy is furthering its commitment to Bitcoin with the announcement of the pricing for its perpetual preferred stock offering, Strike. The company has set a public price of $80 per STRK share and plans to issue these financial instruments on February 5. With this fundraising, MicroStrategy anticipates revenue of $563.4 million, with an 8% coupon and a liquidation value of $100 per share.
The funds raised will primarily be allocated towards acquiring new bitcoins and covering operational expenses. This strategy aligns with the company’s ’21/21′ plan, which entails issuing $21 billion in stocks and $21 billion in fixed-income securities to fund its BTC accumulation. MicroStrategy, led by Michael Saylor, is thus becoming the most committed institutional player in Bitcoin adoption.
A Continuously Expanding Bitcoin Portfolio
On January 27, MicroStrategy announced an additional purchase of 10,107 BTC for approximately $1.1 billion. According to SaylorTracker data, the company now holds 471,107 BTC, valued at around $49.4 billion, with unrealized gains exceeding $19 billion.
In addition to this acquisition, MicroStrategy also launched a debt repurchase program on January 24. A notice of redemption was issued for its $1.05 billion senior convertible notes due in 2027. Holders of these notes have until February 24 to redeem them at their face value or convert them into MicroStrategy shares.
A Battle Against Taxation of Unrealized Gains
MicroStrategy is not only focused on accumulating Bitcoins but is also engaged in the realm of taxation. Alongside Coinbase, the company sent a letter to the Internal Revenue Service (IRS) on January 2nd to oppose the Corporate Alternative Minimum Tax (CAMT), a 15% tax applied to companies whose adjusted financial income exceeds $1 billion over three years.
According to MicroStrategy and Coinbase, this rule could result in unfair taxation of unrealized gains on digital assets, heavily impacting Bitcoin-holding companies without them having sold their positions. If this measure were to be upheld, MicroStrategy could end up paying billions of dollars in taxes on its BTC holdings, despite not converting them to dollars.
