KeyTakeaways:
- MicroStrategy plans to raise shares to fund continued Bitcoin acquisitions.
- The “21/21” plan aims to generate $42 billion for Bitcoin expansion.
- Despite recent stock drop, MicroStrategy’s shares have surged 450% this year.
MicroStrategy has proposed to increase its share count as part of its ongoing strategy to expand its Bitcoin holdings.
MicroStrategy plans to increase its Class A common shares from 330 million to 10.33 billion and its preferred shares from 5 million to 1.005 billion.
These proposed increases are outlined in the company’s proxy statement, 14A, filed with the U.S. Securities and Exchange Commission (SEC).
This move is intended to facilitate MicroStrategy’s “21/21” plan, a three-year, $42 billion capital initiative to generate $21 billion in equity capital and another $21 billion in fixed-income instruments, including debt and convertible notes.
The expansion of shares would help fund MicroStrategy’s continued acquisition of Bitcoin. In recent months, MicroStrategy has been on a buying spree, acquiring more Bitcoin. Its most recent purchase was 5,262 BTC at an average price of $106,662 per coin, bringing its total holdings to 444,262 BTC, valued at over $41.6 billion.
Supporting the “21/21” Plan
MicroStrategy’s “21/21” plan is a comprehensive capital strategy designed to increase its Bitcoin holdings over the coming years. By raising major capital through both equity and fixed-income instruments, the company plans to secure the necessary funds to continue expanding its Bitcoin treasury.
The plan aims to tap into public equity markets and debt instruments to generate the capital needed for future bitcoin purchases, which remain central to MicroStrategy’s strategy.
Board Expansion and Strategic Changes
As part of this shift, MicroStrategy has changed its board of directors. Recently, the company expanded its board from six to nine members, adding Brian Brooks, Jane Dietze, and Gregg Winiarski to bring in additional expertise.
Brooks, who previously served as CEO of Binance, Dietze, a Galaxy Digital board member, and Winiarski, a seasoned financial expert, are expected to help guide the company through this ambitious phase of its bitcoin acquisition strategy.
Market Reaction to MicroStrategy’s Moves
While MicroStrategy’s stock price traditionally rises following news of new Bitcoin acquisitions, its share price fell by 8.78% the day after the announcement of the latest bitcoin purchase.
Despite this short-term drop, the company’s shares have surged by 450% over the past year, reflecting strong long-term growth, while the price of Bitcoin has recently seen a slight decline.
