MicroStrategy (now d/b/a Strategy, Inc.) has transformed itself into a “Bitcoin Treasury Company” , using its balance sheet as leverage to accumulate Bitcoin. As of mid-2025 it held over 628,791 BTC (cost ~$46.1 billion) . The company likens its capital-raising playbook to gears on a bicycle: it shifts financing modes (equity, debt, preferred stock) to suit macro conditions. In bull markets or high mNAV (market cap vs Bitcoin NAV), it cranks up issuance to “acquire bitcoin” aggressively ; in weaker markets it dials back or uses low-cost debt. CEO Phong Le explains that “using proceeds from equity and debt financings…we strategically accumulate Bitcoin” . Indeed, MicroStrategy explicitly codifies this with mNAV-based rules: if its share price falls below 2.5× Bitcoin NAV, it largely halts new equity issuances (except to cover interest/dividends); at 2.5–4.0× it issues opportunistically; above 4.0× it actively raises capital to buy BTC . This disciplined framework is akin to shifting gears – it helps manage dilution and risk.
Financing Instruments (“Gears”)
MicroStrategy’s “gears” include convertible debt, common stock, and multiple series of preferred stock, each tailored for different conditions:
- Convertible Senior Notes (zero-coupon) – In late 2020 and through 2024–25, MicroStrategy issued large rounds of 0% convertible bonds (long maturity, e.g. due 2029 and 2030). For example, in Nov 2024 it sold $3.0 billion of 0% senior notes due 2029 (conversion price $672.40) . In Feb 2025 it privately placed $2.0 billion of 0% senior notes due 2030 (conv. $433.43) . The net proceeds (≈$1.99B) were plowed into Bitcoin – the Feb 2025 notes funded the purchase of 20,356 BTC at ~$97.5K each . These long-dated, no-cash-coupon notes let MicroStrategy delay cash outlays, buffering bear-market risks. When these notes mature, holders can convert them into common shares (or be refinanced), avoiding large principal repayments.
- Class A Common Stock (ATM offerings) – MicroStrategy continuously sells new common shares via at-the-market programs. When the stock trades at a premium to NAV (as it often has), each $1 of equity raised buys several dollars of BTC. For instance, in Q4 2024 the company issued 42.3 million new Class A shares for $15.1 billion , then on Jan–Feb 2025 sold another 6.49 M shares ($2.4B) under the ATM program. In Q1 2025 it launched a record $21 billion new ATM offering, raising about $6.6 billion by late Apr’25 . These equity raises coincide with large bitcoin buys: in Q4’24 and Q1’25 MicroStrategy bought 218,887 BTC and 301,335 BTC respectively (see table below). The proceeds from stock sales directly funded those purchases. The company has authorization to sell billions of shares (e.g. board-approved share count up to 10.33 billion in Jan 2025 ), giving it a deep “fuel tank.”
- Preferred Equity (STRK, STRF, STRD, STRC series) – Beginning in 2024–25, MicroStrategy created multiple perpetual preferred stocks to raise capital while providing fixed-income-like dividends. Each series targets different investors and risk levels, sitting senior to common stock but junior to debt. Key offerings: STRK (8.00% fixed dividend, IPO Jan 2025, $563 M raised ; ATM program launched Mar 2025 with $20.9B capacity ); STRF (10.00%, IPO Mar 2025, $711 M raised ; ATM capacity $2.1B); STRD (10.00%, IPO May 2025, $980 M raised ; ATM program up to $4.2B); and STRC (variable-rate short-duration preferred, IPO July 2025, $2.5 B raised ). These preferred issuances added leverage without immediately diluting common shareholders. For example, the Jan 2025 STRK IPO raised $563 M (at $80/share), which MicroStrategy added to its BTC treasury. Later, the July 2025 STRC IPO ($90/share) became the largest equity raise to date , given its size and investor demand.
Each financing “gear” has its purpose. When yields were near zero, MicroStrategy used convertible bonds (e.g. 2029/2030 notes) to cheaply amplify BTC exposure. When share price multiples were high, it issued common stock to rapidly grow holdings. When broader markets demanded yield, it issued high-yield preferreds (8–12% dividends) to attract fixed-income capital. Collectively, these instruments let MicroStrategy maintain a rolling pipeline of funding for Bitcoin.
Table: Capital Raises vs. Bitcoin Acquired (2024–2025)
| Instrument/Offering | Date(s) | Net Proceeds | Approx. BTC Acquired |
| Class A Common Stock (ATM) | Q4’24 | $15.1 B | 218,887 BTC |
| 0% Convertible Notes (due 2029) | Nov’24 | $2.97 B | Used to fund above BTC buy |
| 0% Convertible Notes (due 2030) | Feb’25 | $1.99 B | 20,356 BTC |
| Series A Preferred (STRK, 8%) IPO | Jan’25 | $563 M | – (added to BTC treasury) |
| STRK (8%) ATM | Mar–Apr’25 | $75.7 M | – |
| Series A Preferred (STRF, 10%) IPO | Mar’25 | $711 M | – |
| Series A Preferred (STRD, 10%) IPO | May’25 | $980 M | – |
| STRD (10%) ATM | Jul’25 | $17.9 M | – |
| Series A Preferred (STRC, var rate) | Jul’25 | $2.50 B | – |
| Class A Common Stock (ATM) | Q1’25 (Jan–Apr) | $6.6 B | 301,335 BTC |
Notes: Transactions above are drawn from public filings and earnings releases. In Q4’24 MicroStrategy used the $15.1B from its ATM offering plus $2.97B from 2029 bonds to buy 218,887 BTC for $20.5B . Similarly, in Q1’25 a $6.6B common stock ATM fueled a 301,335 BTC acquisition . Preferred stock proceeds (STRK/STRF/STRD/STRC) augmented the war chest, effectively financing additional BTC buys via equity.
Capital Structure & Leverage
MicroStrategy’s capital structure now reflects its crypto focus. After raising and converting early debt, the company eliminated its 2027 notes in Jan 2025 (bondholders converted $1.05B into 7.37M shares ). The remaining long-term debt is largely the zero-coupon 2029/2030 notes. In January 2025 shareholders approved a massive increase in authorized shares (from 330M to 10.33B common; preferred from 5M to 1.005B) , giving the company near-limitless issuance capacity. Preferreds are perpetual (no maturity) and cumulative, so dividends accrue until paid. For example, STRK has an 8% annual dividend on a $100 par value , STRF and STRD pay 10%, STRC’s dividend is variable (targeted ~9%). These instruments rank above common equity in claims, effectively layering fixed-income tranches under common. This “treasury capital structure” allows MicroStrategy to lever: common equity and convertible instruments dilute equity but carry no immediate cash interest; preferreds provide fixed yield to investors while preserving control.
The leverage is substantial: as one analyst noted, MicroStrategy has “doubled its share count” and borrowed $7.27 B in convertibles over 5 years to buy bitcoin (investor commentary). In effect, MicroStrategy is a leveraged Bitcoin ETF with equity, aiming for “Bitcoin Torque” – each dollar raised buys multiple dollars of BTC. In up markets, this torque amplifies gains; in down markets it magnifies losses. The company acknowledges this trade-off: declining Bitcoin prices can undercut mNAV and limit future issuance (the “downshift” gear).
Market-Condition Adaptation & Risk Management
MicroStrategy adapts its approach by shifting gears with market signals:
- Bullish/High mNAV – Ramp up issuances. Example: Late 2023–2024 boom, MicroStrategy accelerated buying every week, punctuating calm accumulation with “mega-purchases” whenever large raises closed . In Q4’24, it “completed $20 billion of our $42 billion capital plan” ahead of schedule . High crypto prices and a bullish outlook (bitcoin ~$93K end-2024) meant the company could issue shares and notes at high multiples, funding 218K BTC at all-time-high prices . Preferred offerings (STRK/STRF/STRD/STRC) were timed when investor demand was strong, adding stable capital with known yields.
- Bearish/Low mNAV – Conserve resources. During the 2022 crypto bear market, MicroStrategy largely “HODL”-ed its bitcoin. It did not liquidate crypto assets despite steep price drops, thanks to its financing structure (Crosby Advisory notes that 0% convertibles meant no cash outflows in 2022) . When its mNAV fell below 1×, the company curtailed ATM equity sales (as per its >2.5× threshold rule ) and even sold a small amount of BTC (~704 BTC in Dec’22) only for tax purposes, immediately rebuying more after. If Bitcoin weakens and mNAV contracts, MicroStrategy’s guidance says it will limit new common issuance (fund only obligatory payments) .
- Interest Rate/Volatility Response – Structure instruments to manage cost. STRC (launched Jul’25) is a variable-rate preferred aimed at “price stability” : its dividend rate will adjust monthly to target a $100 price (lowering yield if Bitcoin rallies). Michael Saylor notes STRC’s lower cost (paid less interest than prior 11.75% notes) means “more Bitcoin per dollar” . This kind of innovation (introducing short-duration preferreds in 2025) is partly a response to rising capital costs. If rates rise, MicroStrategy can dial down the “gear” (e.g. issue variable-rate stock) rather than fixed 0% debt that might be less attractive to investors.
- Disciplined Targets – The company sets KPIs (like “BTC Yield” and “BTC $Gain”) and has raised them as execution outpaced targets (e.g. 2025 BTC Yield target was 15% at Q4’24 , later raised to 30% after hitting 25% by mid-2025 ). This shows confidence in continued accumulation, but also a method to gauge when to push or pull back on buying.
Overall, MicroStrategy’s strategy is dynamic. It leverages up aggressively during bull runs, but its capital framework (long maturities, convertible options, dividend-based pref) cushions cash demands. The built-in rules (mNAV thresholds, dividend discipline on STRC, etc.) help manage dilution and risk. As CFO Andrew Kang put it, these steps “grow our Bitcoin holdings while delivering superior shareholder value,” even publishing a formal capital-markets framework to make this transparent .
Notable Transactions & Outcomes
- Q4 2024: Largest-ever quarterly purchase. MicroStrategy raised $15.1 B via common stock ATM and $2.97 B via new convertible bonds , then bought 218,887 BTC (~$20.5B) at ~$93K each . This spike followed weeks of stock rally and wide mNAV, maximizing buying power at the market peak.
- Q1 2025: Record equity raise and pref issuances. The company closed a $21 B ATM offering (via NASDAQ filing) , sold $563 M of STRK (8%) and $711 M of STRF (10%) preferred . Using these proceeds (and $2.0B from new 2030 convertible notes ), MicroStrategy added ~301,335 BTC in Q1 . In just four months of 2025, it achieved ~90% of its full-year BTC gain target .
- July 2025: Innovative preferred IPO. In late July MicroStrategy launched STRC, a variable-rate monthly preferred, raising $2.5 billion at $90/share . This “short-duration, high-yield” security was Saylor’s largest-ever equity raise and is designed to lower funding cost as Bitcoin climbs . It demonstrates how MicroStrategy engineers new products (another “gear”) when needed.
- Ongoing Weekly Buys: From late 2023 through mid-2025, MicroStrategy bought Bitcoin almost every week. For example, in November 2024 it simultaneously issued equity and debt to buy 55,500 BTC in one week ; in Q2’25 it averaged ~5,000–10,000 BTC per month . Even brief pauses (e.g. one week in July 2025) are rare and typically tied to tactical reasons.
Each major financing event directly boosted Bitcoin holdings. The cumulative effect: since 2020 MicroStrategy’s BTC stack grew from zero to over 638,000 BTC by Sept 2025 (market value ~$74B) with average cost ~$68K . Its Bitcoin-per-share has climbed steadily (over 25% higher YTD in 2025) , even as long-term debt and share count have risen.
References
The above analysis draws on MicroStrategy’s public filings and investor releases. Key sources include its Q4’24, Q1’25, and Q2’25 earnings reports (BusinessWire/NASDAQ and strategy.com), SEC 8-K filings (e.g. Feb 2025 convertible note update) and official disclosures . These documents detail the amounts raised, shares issued, and Bitcoin purchases that underpin the strategy. The capital markets framework and KPI targets are also from MicroStrategy’s releases . All figures are as reported by the company or regulatory filings as of mid-2025.