MicroStrategy's recent announcement of issuing a new class of preferred stock has stirred investor concerns, leading to a notable decline in its stock price. The issuance of 7.3 million shares of 8.00% Series A Perpetual Strike Preferred Stock, as detailed in an SEC 8-K filing, is intended to bolster the company's capital structure. However, the move has raised apprehensions about potential dilution for common stockholders, as the preferred stock ranks senior in terms of dividends and liquidation. The market's reaction reflects unease over how this financial maneuver might affect the company's equity structure and future earnings per share.
The Defiance Daily Target 1.75x Long MSTR ETF (MSTX) experienced a significant drop, closing at $43.49, down 6.93% from its previous close of $46.73, as of 5:20 PM on Wednesday, February 5.