Strategy Inc. (NASDAQ:MSTR) CEO Phong Le said on Wednesday that financial tools popularized by the firm were employed in Google parent Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) proposed capital raise.
CEO Sees Strategy’s Win In Google’s Raise
In an X post, Le pointed out that Google’s proposed $80 billion equity capital raise, now upsized to $84.75 billion, includes $15 billion convertible preferred stock and a $40 billion at-the-market offering, instruments that Strategy has used before.
The fundraising initiative, by far the largest and most notable capital raise in Alphabet’s public history, is explicitly designed to expand its AI infrastructure and global compute capabilities.
“Financing tools popularized by MSTR to acquire Bitcoin are now being used by a Mag 7 company to build AI,” Le said. “AI and Bitcoin are the digital rails of the future.”
Le attached a graphic that traces the preferred capital’s trajectory, its mid-20th century decline, and “re-emergence” in digital asset and compute financing in the 21st century.
Is Strategy Taking Undue Credit?
Convertible preferred stock is a hybrid security that offers fixed dividend payments while giving investors the option to convert their shares into a predetermined number of common shares. An at-the-market offering, meanwhile, enables publicly traded companies to raise capital by incrementally selling new shares directly into the secondary trading market.
Strategy offers a convertible perpetual preferred stock (NASDAQ:STRK) that pays 8% annual dividends, with each share of STRK convertible into 0.1 shares of MSTR.
Strategy and its Chair, Michael Saylor, have positioned their preferred stock offerings as ‘Digital Credit’ — a high-yield, lower-volatility income instrument. The company uses the proceeds from these issuances to purchase additional Bitcoin (CRYPTO: BTC).
However, the comparison with Google didn't sit well with critics. Some X users pointed out that convertible preferreds are an old and widely used financial tool employed by many companies
Notably, Microsoft Corp. (NASDAQ:MSFT) issued $1 billion in convertible preferred shares in 1996, which were later converted into common shares in 1999.
MSTR Stock Sinks
Meanwhile, Strategy is dealing with its own challenges. The stock has dropped sharply since the company reported the sale of its Bitcoin holdings.
The company is now facing unrealized losses, as Bitcoin's price has fallen below the average acquisition cost of its BTC holdings
Price Action: At the time of writing, BTC was exchanging hands at $6,419.71, down 6.61% in the last 24 hours, according to data from Benzinga Pro.
Strategy shares fell 2.19% in after-hours trading after closing 7.01% lower at $126.55 during Wednesday’s regular trading hours.
Benzinga's Edge Stock Rankings indicate that MSTR has underperformed with a weaker price trend across short-, medium-, and long-term timeframes.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Markus Mainka on Shutterstock.com
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