MicroStrategy plans to raise up to 2 billion USD through the issuance of preferred stock as part of its 21/21 initiative, which involves selling 42 billion USD in equity and fixed-income securities. The company has successfully utilized convertible bonds to leverage share price volatility, resulting in a 500% increase in its stock price last year.

Investment demand is buoyed by convertible bonds’ appeal due to their higher implied volatility. Benchmark analysts note that the oversubscription and strong pricing of these convertible offerings reflect investors’ valuing of equity conversion options. For example, in November 2024, a convertible bonds issuance increased from 1.75 billion USD to 3 billion USD due to robust demand.

MicroStrategy’s move to perpetual preferred stock could attract institutional investors seeking fixed dividends and lower volatility, unlike traditional bonds. Analysts suggest that features like cash dividends and conversion into common stock enhance appeal to these investors by offering a unique proposition tied to the volatile cryptocurrency market, particularly Bitcoin.