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MicroStrategy Preferred Stock Had to Be Sold At a Discount. What It Yields Now. - Barron's

1. MicroStrategy issued $584 million in convertible preferred stock at $80 per share. 2. The deal was priced below the anticipated $100 to attract investors. 3. The preferred shares offer a 10% yield but raise concerns over tax treatment. 4. MicroStrategy's substantial Bitcoin assets back the preferred stock offering. 5. Investors await confirmation on the 2025 dividend's tax implications.

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FAQ

Why Bearish?

The pricing below expectations indicates potential weakness in investor sentiment. Past convertible debt issues faced similar challenges.

How important is it?

The offering impacts MicroStrategy’s financial structure and perceived value. It reflects on investor confidence in the company’s future earnings.

Why Short Term?

Immediate investor reaction to the offering may impact stock price initially. Over time, Bitcoin price movements could alter sentiment more significantly.

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