- MicroStrategy plans a $2B stock offering to expand its 446,400 BTC holdings.
- MicroStrategy owns 446,400 BTC with an average price of $62,500 per coin.
- MicroStrategy raised $209M to buy 2,138 BTC, now planning $2B for more purchases.
MicroStrategy, headed by its executive chairman, Michael Saylor, plans to issue a perpetual preferred stock worth $2 billion.The funds will aid the company’s strategy of increasing its holdings of Bitcoins as a currency.
The offering was filed with the U.S. Securities and Exchange Commission (SEC) using form S-3. MicroStrategy has hinted that the number of shares and offering price may not be finalized, and they may decide not to proceed. MicroStrategy’s “21/21” strategy also aims to sell $21 billion of equity and fixed-income securities within three years.
MicroStrategy’s Bold Bitcoin Strategy
MicroStrategy holds the biggest position, having 446,400 BTC in its treasure. Its most recent purchase was 2,138 BTC for $209 million, an average of $97,837 per Bitcoin. This brought the company’s total Bitcoin investment in 2024 to 257,250 BTC, making it its most significant acquisition year.
The company’s average Bitcoin purchase price is $62,500 per coin, positioning MicroStrategy with a 57.2% gain on its total investment. Over the years, the firm has utilized convertible notes, debt instruments, and equity financing to fuel its Bitcoin acquisition strategy, demonstrating an unwavering commitment to the asset.
Impact on MicroStrategy Shares and Market Reaction
MicroStrategy’s approach and focus on investing in Bitcoins have significantly affected its stock prices. The company’s stock increased in value by 438% year over year, reaching $339.6 by January 3rd. However, the announcement of the perpetual preferred stock offering caused a minor decline, with shares slipping by 0.19%.
Despite the impressive year-to-date gains, MSTR shares remain 46% below their November peak of $543. This decline is partly attributed to concerns over the company’s ambitious funding strategy, which heavily relies on leveraging equity and debt. Critics have voiced concerns that the proposed funding plans could dilute shareholder value if approved.
