MicroStrategy Launches Bitcoin-Backed Preferred Stock

CRYPTO
MicroStrategy Launches Bitcoin-Backed Preferred Stock

MicroStrategy (MSTR), led by Michael Saylor, has introduced a new way to raise capital for Bitcoin with its perpetual preferred stock offering (STRK). Analysts see this as a game-changer, potentially more accretive than convertible bonds or share sales.

Preferred stock sits between debt and equity, offering stable returns like bonds while granting an ownership stake. Analyst Ben Werkman highlighted its appeal to institutional investors due to its lack of maturity risk and stable yield. He believes STRK could attract capital traditionally allocated to convertible bonds.

Jeff Park of Bitwise Investments called STRK a next-generation investment vehicle, offering two ways to win: benefiting from lower interest rates or converting into MSTR equity.

The U.S.'s largest preferred stock ETF, BlackRock’s PFF, holds $15 billion in assets, showing strong demand for such instruments. Final pricing details for STRK will be announced after markets close Thursday.

TECH
Meta Reports Strong Q4 Earnings Growth

Mark Zuckerberg acknowledges China’s DeepSeek AI has some “novel” innovations, but it hasn’t altered his commitment to Meta’s massive AI infrastructure investment. During the Q4 earnings call, he reaffirmed plans to spend between $60 billion and $65 billion on capital expenditures in 2025—up from $39 billion in 2024—as Meta builds AI-powered data centers. Over time, Meta will invest hundreds of billions into AI infrastructure.

The generative AI arms race, led by Meta, Microsoft, and Alphabet, is centered on owning advanced computing resources. OpenAI, Oracle, and SoftBank recently announced a $500 billion investment in AI data centers under the Stargate project. DeepSeek’s low-cost, open-source AI models challenged existing assumptions, but Zuckerberg sees it as validation of Meta’s Llama AI being open source.

Meta reported Q4 2024 revenue of $48.4 billion, beating expectations. Net income surged to $20.8 billion ($8.02 per share), surpassing Wall Street’s $6.76 EPS estimate.

TECH
Nadella Sees DeepSeek as AI Boost

Microsoft CEO Satya Nadella sees DeepSeek’s AI advancements as a net positive for the U.S. AI industry rather than a threat. During Microsoft’s Q4 earnings call, Nadella was asked about AI scaling in light of DeepSeek’s ability to compete with American AI at a fraction of the cost.

“What’s happening with AI is no different than what happened in computing before,” he said, emphasizing that efficiency gains drive broader adoption. Nadella compared the shift to cloud storage, where lower prices led to greater demand.

Despite DeepSeek rattling U.S. tech stocks, Nadella believes its innovations will become commoditized and integrated into AI ecosystems globally. He noted AI’s rapid progress, highlighting how advanced models now run on PCs, a task that once required massive cloud infrastructure.

“For a hyperscaler like us and a PC platform provider, this is all good news,” Nadella concluded, signaling Microsoft’s confidence in AI expansion.

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