Benchmark: MicroStrategy's $2 billion preferred stock strategy will attract insurance companies, pension funds and other institutions

MicroStrategy plans to raise up to $2 billion through the issuance of preferred stock, advancing its "21/21" plan to sell $42 billion worth of stocks and fixed-income securities. Benchmark equity analyst Mark Palmer said that by switching to a perpetual preferred stock strategy, MicroStrategy can attract institutional investors such as insurance companies, pension funds and banks. These entities generally favor assets with fixed dividends and relatively low volatility. Unlike bonds, perpetual preferred stocks have no maturity date or mandatory redemption schedule, but instead pay fixed dividends indefinitely as long as the issuing company is still in operation. Benchmark reiterated its "buy" rating on MicroStrategy shares and maintained a $650 price target.