01—Abstract
Summary
Summary of the 8-K filed January 3, 2025. Cited figures are marked; the original filing is the authoritative source.
On January 3, 2025, MicroStrategy Incorporated (Nasdaq: MSTR) filed a Form 8-K announcing that, in furtherance of its previously announced 21/21 Plan, it is targeting a capital raise of up to $2 billiona through one or more public underwritten offerings of perpetual preferred stock that would be senior to its class A common stock.
The 21/21 Plan is described as a capital plan to raise $21 billionb of equity and $21 billion of fixed income instruments, including debt, convertible notes and preferred stock, over three years. The company states that the proposed preferred stock may include features such as convertibility into class A common stock, cash dividend payments, and redemption provisions. The number of depositary shares, final terms, and offering price have not yet been determined.
The Offering is expected to be registered on Form S-3 and, if it occurs, is expected in the first quarter of 2025. The stated purpose is to continue strengthening the balance sheet and to acquire more bitcoin.
The filing emphasizes that proceeding with the Offering is at the company's sole discretion, subject to market and other conditions, and that MicroStrategy may choose not to proceed with or consummate the Offering at all. The filing itself is not an offer to sell securities and is issued under Rule 135 of the Securities Act.
02—Key points
Key Highlights
- Targeting a capital raise of up to $2 billion via one or more public underwritten offerings of perpetual preferred stock
- Preferred stock would be senior to class A common stock and may include convertibility, cash dividends, and redemption provisions
- Offering is part of the previously announced 21/21 Plan: $21 billion of equity and $21 billion of fixed income instruments over three years
- Stated purpose is to continue strengthening the balance sheet and acquire more bitcoin
- Offering expected to be registered on Form S-3; final terms, depositary share count, and price not yet determined
- Timing expected, if at all, in the first quarter of 2025, subject to market conditions and company discretion
- Company may choose not to proceed with or consummate the Offering at all
03—Questions
Frequently Asked Questions
How much capital is MicroStrategy targeting in this offering?
MicroStrategy is targeting a capital raise of up to $2 billion through one or more public underwritten offerings of perpetual preferred stock.
What features could the perpetual preferred stock include?
The filing states the preferred stock may include convertibility into class A common stock, payment of cash dividends, and provisions allowing for redemptions, among other features.
What is the 21/21 Plan?
The 21/21 Plan is a capital plan to raise $21 billion of equity and $21 billion of fixed income instruments, including debt, convertible notes and preferred stock, over the next three years.
When is the offering expected to occur?
The offering is expected to occur, if at all, in the first quarter of 2025, and the decision to proceed is in the company's sole discretion and subject to market and other conditions.
What will the proceeds be used for?
The stated purpose of the offering is to allow MicroStrategy to continue to strengthen its balance sheet and acquire more bitcoin.
04—Continue