MicroStrategy, operating as Strategy, announced on May 22, 2025, plans to raise up to $2.1 billion by issuing 10% Series A Perpetual Strife Preferred Stock (ticker: STRF) through an at-the-market (ATM) offering. The stock, priced at $0.001 par value per share, offers a 10% annual dividend, paid quarterly if declared by the board, with a $100 liquidation preference.

Proceeds are intended for general corporate purposes, including potential Bitcoin purchases, aligning with the company’s strategy to bolster its Bitcoin treasury, which held 576,230 BTC as of May 18, 2025. The sale, managed by TD Securities, Barclays Capital, and The Benchmark Company, will occur gradually under SEC Rule 415(a)(4), with agents earning up to 2% commission. This move follows earlier offerings, including a $21 billion ATM program for 8% perpetual strike preferred stock (STRK), and is part of Strategy’s broader 21/21 Plan to raise $42 billion for Bitcoin acquisitions and corporate purposes.

The proceeds are primarily earmarked for general corporate purposes, with a strong likelihood of further Bitcoin purchases, as seen in Strategy’s 21/21 Plan to acquire $42 billion in Bitcoin. This reinforces the company’s identity as a “Bitcoin Treasury Company,” with its current 576,230 BTC holdings (valued at approximately $57 billion at $100,000 per BTC as of May 2025). This strategy ties Strategy’s financial health closely to Bitcoin’s price volatility. A rising Bitcoin market could boost its valuation, but a downturn could exacerbate financial strain, especially with high dividend obligations.

Financial Structure and Risk

The 10% dividend on the preferred stock is high, reflecting the risk profile and Strategy’s need to attract investors. However, dividends are not guaranteed and depend on board approval, introducing uncertainty for investors. The perpetual nature of the stock, combined with a $100 liquidation preference, prioritizes preferred shareholders over common shareholders in a bankruptcy scenario, potentially diluting common equity value.

The high dividend yield could strain cash flows if Bitcoin underperforms or if operational revenues (from Strategy’s software business) falter. This could lead to increased leverage, as the company has been funding Bitcoin purchases partly through debt and equity offerings. Strategy’s stock (MSTR) has become a proxy for Bitcoin exposure, often moving in tandem with BTC prices. The ATM offering allows gradual sales, potentially minimizing immediate market impact, but large-scale issuances could still pressure the stock price.

Investors may view this as a bold bet on Bitcoin’s long-term value, but it also amplifies volatility, especially for retail investors holding common shares. The offering could attract institutional investors seeking high-yield securities, but they may demand a premium for the associated risks. Strategy’s aggressive Bitcoin acquisition strategy signals confidence in cryptocurrency as a store of value, potentially influencing other corporations to follow suit. It also increases Bitcoin’s institutional legitimacy.

Large purchases could drive Bitcoin prices higher in the short term, but they also concentrate market risk, as a sell-off by Strategy could trigger significant price drops. Strategy’s strategy creates a divide among stakeholders, reflecting differing priorities and risk tolerances. Those bullish on Bitcoin, including crypto enthusiasts and hedge funds, support Strategy’s pivot to a Bitcoin-centric model. They see the preferred stock offering as a way to fund further BTC accumulation, potentially amplifying returns if Bitcoin’s price surges.

Investors focused on Strategy’s core software business may view the Bitcoin strategy as a risky distraction. The high dividend on preferred stock and potential dilution of common shares could erode their returns, especially if Bitcoin underperforms. The 10% dividend and liquidation preference make the preferred stock attractive to income-focused investors, such as pension funds or high-yield seekers. However, the perpetual nature and discretionary dividends introduce risks.

Common Shareholders face subordination to preferred shareholders in liquidation scenarios and potential dilution from ongoing ATM offerings. Their returns are more tied to Bitcoin’s performance and MicroStrategy’s stock price, which has been volatile (e.g., MSTR’s market cap was $99 billion as of May 18, 2025, despite software revenues of ~$500 million annually).

Crypto advocates on platforms like X celebrate Strategy’s CEO, Michael Saylor, for his bold Bitcoin strategy, viewing it as a hedge against inflation and fiat devaluation. Posts on X highlight Saylor’s vision of Bitcoin as “digital gold.” Critics, including some financial analysts, argue that Strategy’s leveraged Bitcoin bets resemble a speculative hedge fund rather than a stable corporation. They warn of systemic risks if Bitcoin crashes or if Strategy faces liquidity issues servicing its obligations.

The ATM structure allows Strategy to sell shares opportunistically, potentially stabilizing MSTR’s stock price compared to a large one-time offering. However, market reactions will depend on Bitcoin’s price trajectory and investor sentiment toward crypto. Strategy’s heavy Bitcoin exposure makes it vulnerable to regulatory changes like stricter crypto laws, market corrections, or operational challenges in its software business.

The offering may widen the gap between crypto-aligned investors and those prioritizing traditional financial metrics, as Strategy’s valuation increasingly decouples from its core business fundamentals.

Interesting from Nigeria’s electoral umpire: “The Independent National Electoral Commission (INEC) has taken a major step toward integrating advanced technologies into Nigeria’s electoral process with the creation of a dedicated Artificial Intelligence (AI) Division under its ICT Department. Announced on Thursday, the initiative is part of a broader reform drive aimed at modernizing election management systems and strengthening the credibility of future polls—especially the 2027 general elections.”

Good People, INEC’s problem is not lack of AI or technology. The problem in my opinion is that INEC is protected by the Constitution and the Electoral Act to remain unaccountable. Sure – what is this village guy saying about the law? Pardon me because when it comes to the nation, we can all have voices.

This has been my suggestion: we need a system, where as part of an election dispute resolution, the aggrieved candidate would sue the Independent National Electoral Commission (INEC) instead of the opponent, on issues of not conducting elections as written in the rule book. This would represent a significant shift from the current system, where candidates typically challenge the election results by suing the declared winner.

Yes, two people contested an election and one was declared a winner. Then, a few days later, you sue the opponent because you do not agree with the outcome. Why is that so? Why not the umpire which managed the election, and let it prove that the results are indeed valid.

Until Nigeria changes the rule book, INEC will not have any incentive to evolve. And this is not an area AI has been trained to handle! Indeed, by the time INEC has been sued and it begins to lose cases in court, invalidating the outcomes of electoral results, both the winner and loser will challenge INEC to put its house in order! Then change will happen!

My position is this: if you sue INEC and it loses, both the winner and opponent will be impacted. And that means everyone will be worried if INEC is not following the rule book. The implication is clear: even as you are projected to win, you need to be concerned if INEC is not following the rule.

Today, INEC is not a player, it is just showing “present” because it has nothing to lose. But a system where both the winner and loser are concerned that if INEC loses, everyone is affected, things will change. Think deeper into my idea: it is a mutual destiny playbook, connecting winner and loser to a shared destiny.

INEC Creates AI Division to Bolster Electoral Reform in Nigeria, But Critics Say Human Factor Still The Problem