Michael Saylor’s $6B “Stretch” Perpetual Preferreds: A Bold Bet to Fuel MicroStrategy’s Bitcoin Empire (2025 Update)

Why Is Michael Saylor Betting Big on Perpetual Preferreds?

Michael Saylor isn’t playing by Wall Street’s rules. Instead of traditional equity offerings or convertible debt, MicroStrategy has raised a staggering $6 billion in 2025 alone through four tranches of perpetual preferred stock. These “Stretch” securities—which,, and—are designed to fund bitcoin purchases without diluting shareholders. Think of them as a financial firehose Saylor can turn on whenever BTC dips.

How Are Retail Investors Getting Pulled Into This?

Here’s the kicker: 25% of the $2.5 billion Stretch sale—the largest crypto capital raise this year—went to. That’s wild for preferreds, which usually attract conservative institutions buying blue-chip debt. As Bank of America’s Michael Youngworth put it, “I’ve never seen a company leverage retail frenzy like this.” MicroStrategy’s lack of a credit rating? No problem. Saylor’s pitch? A “BTC Credit Model” where Bitcoin—a volatile, yield-less asset—backs income-generating securities. The goal? A $100–200 billion funding machine. But if demand dries up, MicroStrategy could be stuck with dividend obligations it can’t cover—without selling BTC, per Saylor’s “HODL at all costs” mantra.

What’s the Catch with These Perpetual Preferreds?

These aren’t your grandma’s bonds. The Stretch notes carry—expensive for long-term financing. Worse, if Bitcoin crashes, payouts don’t vanish. Short seller Jim Chanos calls them “crazy” for institutions, noting their non-cumulative nature lets MicroStrategy skip dividends without penalty. Meanwhile, CEO Phong Le sees them as a safer alternative to the 2022 near-disaster when a Bitcoin-backed Silvergate loan almost sank the company. “We may phase out convertibles entirely,” he says. But Wall Street isn’t cheering—convertibles are easier to hedge, and killing them removes a key arbitrage tool.

Can This Model Survive a Bitcoin Crash?

The entire scheme hinges on Bitcoin’s price staying high enough to attract buyers. If sentiment sours, MicroStrategy might have to issue shares below its 2.5x NAV floor to cover dividends—a last-resort move. And while the mNAV premium (the gap between share price and Bitcoin holdings) has helped so far, a crypto winter could evaporate it overnight. As Youngworth warns, “This is a high-wire act with no safety net.”

FAQs: Your Burning Questions Answered

What are perpetual preferred stocks?

Perpetual preferreds are hybrid securities with no maturity date. They pay dividends but sit below traditional debt in the capital stack, offering higher risk (and yield).

Why is MicroStrategy avoiding convertible notes?

Convertibles dilute shareholders when converted to stock. Saylor prefers perpetuals to maintain control while funding Bitcoin buys.

How risky are Stretch notes for retail investors?

Very. Unlike bank-issued preferreds, these lack credit ratings and protections. Dividends can be skipped, and their value depends entirely on Bitcoin’s performance.