Michael Saylor's Strategy Nears 600,000 Bitcoin After $1 Billion Buy Funded By High-Yield IPO, Says TD Cowen Sees 'Very Safe' Upside

MicroStrategy Inc. MSTR, operating under the Strategy brand, has expanded its Bitcoin BTC/USD treasury to 592,100 BTC following a $1 billion purchase funded primarily through its new Stride preferred stock (STRD) offering.

What Happened: The corporate Bitcoin treasury company completed the acquisition last week using proceeds from its upsized $1 billion perpetual preferred stock issuance, reported The Block.

TD Cowen analysts said the STRD offerings will “prove highly accretive” to MSTR shareholders and “establishes a channel for future high yield funds flows into Bitcoin,” the report noted.

Strategy’s latest preferred instrument offers a fixed 10% non-cumulative annual dividend and ranks below the company’s senior preferred shares but above common equity, according to the report. The STRD product joins Strategy’s existing preferred offerings: convertible STRK with an 8% dividend and non-convertible STRF with a 10% cumulative dividend.

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Why It Matters: TD Cowen analysts consider the securities “very safe,” noting Strategy holds $63 billion in underlying Bitcoin value against $11.6 billion in total debt plus preferred stock outstanding, according to the report. The firm maintains a “buy” rating with a $590 price target on MSTR shares.

Chairman Michael Saylor targets a long-term leverage ratio of 20% to 30% through fixed income securities as part of the company’s “42/42” plan to raise $84 billion through 2027 for Bitcoin acquisitions.

The preferred stock strategy capitalizes on what Saylor described to the Financial Times as a “quadratically reflexive, engineered instrument” that allows Strategy to issue shares at premiums to Bitcoin’s value, effectively acquiring BTC at discounts.

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Price Action: MSTR stock closed at $375.18 on Tuesday, down 1.85% for the day. In pre-market trading, the stock edged up 0.14% to $375.71. Year to date, MSTR shares have gained 25.06%.

MSTR shows strong momentum based on price movement and volatility. See where it ranks among the top 20 momentum stocks on Benzinga Edge Stock Rankings.