MicroStrategy Pauses Bitcoin Buys, Shifts to 11.5% Yield Preferred Shares
MicroStrategy halted Bitcoin purchases this week ahead of its May 5 Q1 earnings call, ending a 13-week accumulation streak with 818,334 BTC valued at $64.44 billion. It is shifting funding to STRC preferred shares yielding 11.5% and trading below par, sparking dilution concerns if Bitcoin prices fall.
1. Bitcoin Purchase Pause
MicroStrategy paused Bitcoin acquisitions this week ahead of its May 5 Q1 earnings call, snapping a 13-week accumulation streak. The company holds 818,334 BTC valued at $64.44 billion at an average cost of $75,532 per coin.
2. Shift to Preferred Equity
Capital for Bitcoin funding has shifted from common-stock offerings to the STRC preferred share program. This move aims to minimize dilution of common equity following aggressive Bitcoin drawdowns.
3. STRC Share Features and Risks
STRC preferred shares pay an 11.5% dividend and recently traded below par, making them the primary funding engine. Critics warn the structure could cause dilution and refinancing risk if Bitcoin prices decline further.
4. Upcoming Q1 Earnings Outlook
Investors anticipate Q1 revenue near $120 million and a GAAP loss driven by mark-to-market Bitcoin accounting, with consensus EPS around -$3.41. The May 5 call will reveal whether Bitcoin buying resumes or yield discipline dominates.