Year-end interest 8% with 20% off issuance! Are the perpetual preferred stocks of STRK of MicroStrategy tempting?

MicroStrategy, a self-proclaimed Bitcoin development company, halted its record of buying BTC for 12 consecutive weeks today, and will announce its Q4 2024 financial report after the US stock market closes. Will the permanent preferred shares of its issuance, which offer an 8% annual dividend and a 20% discount on issuance, attract retail investors' actions on today's Delivery?

MicroStrategy Preferred Stock STRK pays an 8% annual dividend, with a 20% discount issuance

MicroStrategy issued 7,300,000 shares of 8% perpetual preferred stock (perpetual preferred stock) STRK at a price of $80 per share at the end of January, raising a total of $563.4 million, more than twice the initial target. Compared to its liquidation price of $100, this issuance is equivalent to a 20% discount. MicroStrategy stated that the proceeds from this issuance will be used for general corporate purposes, including the acquisition of BTC.

Despite the higher cost compared to its holdings of ultra-low-interest convertible bonds and general stock issuance, MicroStrategy previously stated that it may raise up to $2 billion in funds this quarter using this asset class.

STRK will pay quarterly dividends to investors and has an accumulative function to ensure that any missed payments must be made. Its conversion price is set at $1,000, which is nearly double the latest closing price of $348 on (2/4), reducing the likelihood of conversion to common stock in the short term and delaying the dilution of existing shareholders' equity.

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