How much capital is the offering expected to raise?

The company estimates net proceeds of approximately $711.2 million after underwriting discounts, commissions and estimated offering expenses.

What dividend do the preferred shares pay?

The preferred stock accumulates cumulative dividends at a fixed rate of 10.00% per annum on a $100 stated amount, payable quarterly on March 31, June 30, September 30 and December 31, beginning June 30, 2025, when declared by the board and solely in cash.

What happens if a preferred dividend is not paid?

Unpaid regular dividends accumulate compounded dividends compounded quarterly, starting at 10% plus 100 basis points and increasing by 100 basis points for each subsequent dividend period, up to a maximum rate of 18% per annum, until paid in full.

Can the company redeem the preferred stock?

The company may redeem all, but not less than all, of the preferred stock for cash at any time if outstanding shares fall below 25% of the total originally issued in this offering and any future offerings, or if certain tax events occur. The redemption price equals the liquidation preference plus accumulated and unpaid regular dividends.

Strategy 8-K: Material Agreements

01—Abstract

Summary

Summary of the 8-K filed March 21, 2025. Cited figures are marked; the original filing is the authoritative source.

On March 20, 2025, MicroStrategy Incorporated d/b/a Strategy (the company, now Strategy Inc) entered into an underwriting agreement with Morgan Stanley & Co. LLC, as lead manager, for an underwritten offering of 8,500,000 shares of its 10.00% Series A Perpetual Strife Preferred Stock at a public offering price of $85.00^a per share.

The offering is scheduled to settle on March 25, 2025, subject to customary closing conditions, and is being made under an effective Form S-3ASR shelf registration statement. The company estimates net proceeds of approximately $711.2 million^b after underwriting discounts, commissions and estimated offering expenses. It intends to use the proceeds for general corporate purposes, including the acquisition of bitcoin and for working capital.

The press release describes the company as the world's first and largest Bitcoin Treasury Company that has adopted Bitcoin as its primary treasury reserve asset, and also as a provider of AI-powered enterprise analytics software. The preferred stock carries cumulative dividends at a fixed 10.00% per annum on a $100^c stated amount, payable quarterly when declared, solely in cash.

Unpaid dividends compound, with the compounded rate starting at 10%^d plus 100 basis points and rising by 100 basis points each subsequent period up to a maximum of 18% per annum. The company may redeem all shares for cash if outstanding shares fall below 25% of the total originally issued, or upon certain tax events, and holders may require repurchase upon a fundamental change.

02—Key points

Key Highlights

Offering of 8,500,000 shares of 10.00% Series A Perpetual Strife Preferred Stock priced at $85.00 per share, with settlement scheduled for March 25, 2025.
Estimated net proceeds of approximately $711.2 million, to be used for general corporate purposes, including the acquisition of bitcoin and working capital.
Preferred stock has a $100 stated amount and cumulative quarterly dividends at a fixed 10.00% per annum, payable solely in cash when declared.
Unpaid dividends compound quarterly at 10% plus 100 basis points, increasing by 100 basis points per period up to a maximum rate of 18% per annum.
The company may redeem all outstanding preferred shares for cash if fewer than 25% of the originally issued shares remain outstanding, or upon certain tax events.
Holders may require repurchase at the stated amount plus accumulated unpaid dividends upon a fundamental change.
The offering is made under an effective Form S-3ASR shelf registration (No. 333-284510) with Morgan Stanley & Co. LLC as lead manager.

03—Questions

Frequently Asked Questions

How much capital is the offering expected to raise?
The company estimates net proceeds of approximately $711.2 million after underwriting discounts, commissions and estimated offering expenses.
What will the proceeds be used for?
The company intends to use the net proceeds for general corporate purposes, including the acquisition of bitcoin and for working capital.
What dividend do the preferred shares pay?
The preferred stock accumulates cumulative dividends at a fixed rate of 10.00% per annum on a $100 stated amount, payable quarterly on March 31, June 30, September 30 and December 31, beginning June 30, 2025, when declared by the board and solely in cash.
What happens if a preferred dividend is not paid?
Unpaid regular dividends accumulate compounded dividends compounded quarterly, starting at 10% plus 100 basis points and increasing by 100 basis points for each subsequent dividend period, up to a maximum rate of 18% per annum, until paid in full.
Can the company redeem the preferred stock?
The company may redeem all, but not less than all, of the preferred stock for cash at any time if outstanding shares fall below 25% of the total originally issued in this offering and any future offerings, or if certain tax events occur. The redemption price equals the liquidation preference plus accumulated and unpaid regular dividends.

04—Continue

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