MicroStrategy's latest capital-raise plans are for $2 billion of preferred stock to buy more bitcoin

By Ciara LinnaneSoftware company has issued stock for eight straight weeks to purchase bitcoin and now plans a perpetual preferred stock offeringMicroStrategy Inc. unveiled its latest capital raise late Friday with news of plans to issue $2 billion in preferred stock to raise the funds needed to buy more bitcoin.The business-software company and cryptocurrency play, which said it would conduct the sale in the first quarter, if at all, said it would be carried out in one or more public underwritten offerings of perpetual preferred stock.The stock would be senior to its Class A common stock and may include features such as convertibility to Class A stock, dividends and redemptions of shares, among others, the company said in a statement.The move is part of the company's plan to issue $21 billion of equity and $21 billion in fixed-income instruments, including debt, convertible bonds and preferred stock, over the next three years.MicroStrategy said about four years ago that it had adopted bitcoin as its primary treasury reserve asset. The last time it disclosed a stock sale and bitcoin purchases was Dec. 30, when it sold an aggregate of 592,987 shares between Dec. 23 and Dec. 29 for net proceeds of about $209 million.It used those proceeds to buy about 2,138 bitcoin at an average price of $97,837 per bitcoin, the company said in a filing.Before that, on Dec. 23 it said it sold $561 million in shares to buy about 5,262 bitcoin at an average price of $106,662. The company sold stock and used the proceeds to buy bitcoin for eight straight weeks leading up to Friday's preferred stock announcement.Early Monday, it offered another update on its bitcoin purchases, saying it sold an aggregate of 319,586 shares for about $101 million between Dec. 30 and Dec. 31 and purchased about 1,070 bitcoins with the proceeds.As of Jan. 5, the company owned about 447,470 bitcoin, which were acquired at an aggregate purchase price of about $27.97 billion and an average purchase price of about $62.503 per coin.Benchmark analysts reiterated their buy rating on the stock and $650 price target, based on a model that includes the projected value of the company's bitcoin holdings as of year-end 2026. The price target is almost double its current price."We believe MSTR's plan to tap the perpetual preferred market underscores the shareholder value it has been creating through its treasury operations, which helps to justify the premium to the company's net asset value (NAV) at which its stock trades," analyst Mark Palmer wrote in a note to clients.MicroStrategy's stock soared 438% in the last 12 months, including a 32% gain since Donald Trump was elected president. Trump, a Republican, is expected to adopt a more crypto-friendly stance than has been the case under Democratic President Biden and the Securities and Exchange Commission under Gary Gensler, whose stance on crypto has been viewed as "hostile" by many industry participants.Trump, it should be noted, has in years past cast aspersions on cryptocurrencies and called bitcoin a scam.Read: What the big 'key reversal' pattern in MicroStrategy's stock chart could mean.MicroStrategy said the number of shares to be offered and other terms are yet to be decided. The move will also allow the company to bolster its balance sheet.The stock (MSTR) was up 2.5% premarket. Bitcoin (BTCUSD) was up 1.2%.-Ciara LinnaneThis content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.