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Coinpaprika 2024-12-25 12:24:42

MicroStrategy Plans Massive Share Expansion to Buy $42 Billion in Bitcoin

MicroStrategy is gearing up to issue more shares as part of its strategy to boost Bitcoin purchases. The company aims to acquire $42 billion worth of Bitcoin through a mix of equity and debt funding. This move comes as MicroStrategy's stock, $MSTR, has soared by nearly 420% in 2024, mirroring Bitcoin's impressive performance. A special shareholder meeting is planned to approve changes in the firm’s equity issuance policy to support its ambitious acquisition plans. A recent SEC filing dated December 23 outlines MicroStrategy’s proposal to increase its authorized Class A common stock from 330 million to 10.33 billion shares and preferred stock from 5 million to over 1 billion shares. This substantial expansion will give the company more flexibility to issue shares for future funding needs. These changes align with MicroStrategy’s 21/21 Plan, revealed in October, which aims to acquire $42 billion in Bitcoin over three years, funded by $21 billion in equity sales and another $21 billion through fixed-income securities. In December alone, MicroStrategy purchased 42,162 BTC , valued at over $4 billion at current prices. This marks the company’s most aggressive acquisition phase, driven by the belief that acquiring Bitcoin during peak prices maximizes potential returns. “If you are not buying Bitcoin at the top, you are leaving money on the table,” stated Michael Saylor on X (formerly Twitter). As of October, the company reported a Bitcoin yield of 17.8% and is targeting an annual yield of 6% to 10% from 2025 to 2027. So far, MicroStrategy has raised $13 billion through stock sales and $3 billion via convertible bonds. However, a temporary pause in Bitcoin purchases is expected in January due to a planned blackout period. The surge in Bitcoin’s value throughout 2024 has significantly boosted MicroStrategy’s performance, leading to its inclusion in the Nasdaq-100. The company is also a potential candidate for the S&P 500 in the coming year. Michael Saylor highlighted the impact of their treasury operations, which generated a Bitcoin yield equivalent to 3,177 BTC in just one week, adding a net benefit of $299 million to shareholders at $94,000 per BTC. MicroStrategy remains the largest corporate Bitcoin holder, standing out for its relentless accumulation strategy under Saylor’s leadership. Other companies, such as Marathon Digital Holdings and Riot Platforms, have also accelerated Bitcoin purchases, but MicroStrategy continues to lead the pack. The firm’s aggressive approach reflects its commitment to capitalizing on Bitcoin’s bullish momentum.

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