MicroStrategy inks deal for $21 billion stock sale

MicroStrategy Incorporated (NASDAQ:MSTR), currently valued at $100.11 billion, has entered into a Sales Agreement with a consortium of sales agents to potentially sell up to $21 billion of its class A common stock, the company disclosed in a regulatory filing on Thursday. The stock, which has delivered an impressive 269.66% return over the past year, currently trades at $381.60. The financial services firm, which has adopted the name Strategy, plans to conduct the sales through an "at the market offering," allowing the sale of shares at prevailing market prices from time to time.According to InvestingPro analysis, the stock appears to be overvalued at current levels, with significant price volatility being a key characteristic. For deeper insights, investors can access 12 additional ProTips and comprehensive valuation metrics through InvestingPro’s detailed research reports.

The agreement, dated May 1, 2025, involves TD Securities (USA) LLC, The Benchmark Company, LLC, BTIG, LLC, Canaccord Genuity LLC, Cantor Fitzgerald & Co., Mizuho (NYSE:MFG) Securities USA LLC, Santander (BME:SAN) US Capital Markets LLC, and SG Americas Securities, LLC as the sales agents. The sales agents will operate on a commercially reasonable efforts basis, consistent with their normal trading and sales practices.

According to the filing, the offering is part of an existing automatic shelf registration statement that became effective on January 27, 2025. The company will pay the agents commissions of up to 2% of the aggregate gross proceeds from each sale of shares. Moreover, the company and the agents have the right to suspend or terminate the offering upon notice and under certain conditions.

The Sales Agreement and the legal opinion of Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the company, regarding the shares, are included as exhibits in the SEC filing. The company has clarified that this current report does not constitute an offer to sell or a solicitation of an offer to buy the securities.

This move comes as MicroStrategy continues to navigate the financial services landscape, with this potential cash infusion likely to impact its strategic initiatives. The company currently maintains a FAIR financial health score according to InvestingPro metrics, though it operates with moderate debt levels and faces profitability challenges in the near term. The information is based on a press release statement from the company’s SEC filing.Get access to MicroStrategy’s complete financial analysis and future growth prospects through InvestingPro’s comprehensive research reports, available for over 1,400 US stocks.

In other recent news, MicroStrategy Incorporated disclosed its financial activities, revealing significant transactions in its Bitcoin holdings and share sales. The company reported the purchase of 15,355 bitcoins for an aggregate price of $1.42 billion, increasing its total holdings to 553,555 bitcoins. These acquisitions were funded by selling 4,020,000 shares of Class A Common Stock, generating $1.40 billion, and 435,069 shares of its 8.00% Series A Perpetual Strike Preferred Stock, raising $37.5 million. Additionally, MicroStrategy updated its at-the-market (ATM) offering programs, selling shares worth $285.7 million to purchase 3,459 bitcoins.

Benchmark analysts maintained a Buy rating on MicroStrategy with a $650 price target, despite the company reporting a $5.91 billion unrealized loss on its Bitcoin holdings due to new accounting standards. This loss was partially offset by a $1.69 billion income tax benefit. H.C. Wainwright also initiated coverage with a Buy rating and a $480 price target, citing MicroStrategy’s strategic Bitcoin investments as a unique opportunity for investors. These developments highlight MicroStrategy’s ongoing commitment to Bitcoin as a core component of its investment strategy.

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