As per the recent information, MicroStrategy the largest corporate holder of Bitcoin has reannounced its plan to raise $2 billion in funding to buy more BTC, a leading media outlet the company is aiming to raise the amount from perpetual preferred stock offerings.
According to the official press release by MicroStrategy, the Perpetual preferred stock may include features such as convertibility to Class A common stock, allowing investors to benefit from potential price appreciation. It also typically provides fixed cash dividends, offering a steady income stream prioritized over common stock dividends.
The redemption provisions may allow the issuing company to repurchase shares under favorable conditions, providing flexibility in capital management.
This plan of MicroStrategy is widely different from the plan to raise $21 billion in equity and $21 billion in fixed-income instruments. The ongoing fundraising strategies of the company are primarily focused on supporting the Bitcoin buying strategy of the company.
The yet-to-be-executed fundraising program of MicroStrategy intends to help the company improve its balance sheet and strengthen the pace of acquiring Bitcoin.
It is worth noting that as of publishing MicroStrategy was holding 446,400 BTC, making it a significant institutional investor with a massive chunk of Bitcoin.
Fundraising might negatively impact the sentiments of investors
From the beginning of 2024 till its closing MicroStrategy announced the plan to gather funds by either selling, leveraging, or lending different types and classes of shares with an aim to continue its buying of Bitcoin.
The back-to-back announcement of fundraising has created a negative impact on traders and analysts; the majority of analysts even argue that the stock of MicroStrategy is overvalued and might burst like a bubble in the near future.
On the other hand, some analysts argued that the over-dependency on Bitcoin MicroStrategy might lead to severe consequences in the near future, in case of any severe failure in the wider market companies holding Bitcoin and other such blockchain-based currencies are expected to face losses, leading to financial insufficiency and ultimately bankruptcy.
Data available on Google Finance notes that MicroStrategy stock registered a growth of 13.22 percent reaching $339.67; despite the addition in the January 3 trading session, the price of MSTR remains in red in 30 days time, with a loss of $66.34.
Source: TradingView
However in the year-to-date time frame, the stock prices of MicroStrategy remain in bullish territory adding 13.11 percent, and in the past 52 weeks, it registered a growth of 417.93 percent.
If the pace of bullishness remains in the stock price it might soon surpass Accenture, Home Depot, Caterpillar, Tesla, Linde, and Microsoft in terms of stock trading price.
Not only its trading prices but also its market capitalization has reached an appreciable height at $83.37 billion with a growth of 3.98 percent in the past three days. It is crucial to note that the market of MicroStrategy saw a growth of 665.39 percent in the previous year and it grew 546 percent in the year 2023.
