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MicroStrategy (NASDAQ: MSTR) Issues 7.3M Preferred Shares, Stock Drops 3.33%

MicroStrategy Incorporated (NASDAQ: MSTR) shares fell 3.33% to close at $336.70, with a further decline of 0.74% in after-hours trading, following the company's announcement of a new class of preferred stock issuance. According to an SEC 8-K filing dated February 5, 2025, MicroStrategy issued 7.3 million shares of its 8.00% Series A Perpetual Strike Preferred Stock. This issuance, which ranks senior to the company's common stock in terms of dividends and liquidation, is seen as a move to strengthen the company's capital structure but has raised concerns about potential dilution among common stockholders.

The preferred stock offers an 8% annual dividend and can be converted into common stock, which may impact the value of existing shares. The market's reaction suggests investor apprehension about the implications of this new financial instrument on the company's equity structure and future earnings per share.

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