MicroStrategy Raises $335M, Buys 520 Bitcoin to Boost Dividend Reserves
STRC•MicroStrategy raised $335 million via common stock sales and acquired 520 Bitcoin (approximately $34.9 million), lifting cash reserves to cover 9.8 months of preferred dividends, up from seven months. Despite this cushion, STRC preferred shares trade significantly below their $100 par, raising concerns over dividend sustainability and future equity issuance.
1. Major Stock Issuance and Bitcoin Purchase
MicroStrategy sold over $335 million of common shares and acquired 520 Bitcoin for approximately $34.9 million, marking its first significant equity offering since retiring more than $1 billion in convertible debt. Management aims to redeploy these proceeds to strengthen its digital asset portfolio and liquidity position.
2. Dividend Coverage Improvement
The equity raise and Bitcoin purchase increased cash reserves to cover 9.8 months of preferred dividends, up from just seven months, though still below the company’s two-year coverage target. Moving to semi-monthly dividend payouts could enhance appeal ahead of the June 30 ex-dividend date.
3. Preferred Shares Trading Below Par
Despite bolstered reserves, STRC shares remain well under their $100 par level, fluctuating between low $80s and high $80s, reflecting market skepticism over long-term dividend sustainability. Management remains confident in driving the share class toward par through ongoing asset accumulation and reliable dividend payments.
