- MicroStrategy plans to raise $2 billion to buy more Bitcoin, continuing its aggressive investment strategy.
- Investors have mixed reactions, some supporting the move and others fearing market disruption.
MicroStrategy, led by founder and executive chairman Michael Saylor, has announced its intention to raise an additional $2 billion to increase its Bitcoin holdings. The company aims to secure funds through public underwritten offerings of perpetual preferred stock.
$2 Billion Fundraising Initiative
MicroStrategy had earlier announced the 21/21 plan, an initiative to raise at least $21 billion over the next three years, and the company is now gearing up for plans to raise $2 billion this quarter. This will be through offering fixed-income securities, such as debt, convertible notes, and preferred stocks. The company also pointed out that the perpetual preferred stock issue will rank above the Class A common stock that the company currently has.
MSTR Class A will be available to the holders of this stock, who will be privileged to receive cash dividends and exercise the option for share redemption. MicroStrategy plans to submit an offering with the U.S. Securities and Exchange Commission through a form S-3. However, the company has yet to finalize details such as the number of depositary shares, offering price, and specific terms. Additionally, the press release notes that MicroStrategy retains the discretion to abandon the offering if necessary.
Ongoing Bitcoin Purchases and Market Impact
MicroStrategy continues its aggressive Bitcoin acquisition strategy. Early December 2024, the company disclosed that it had purchased 2,138 BTC for $209 million at an average price of $97,837 per Bitcoin. This marked the eighth consecutive Bitcoin acquisition in recent months. As of December 29, the company holds 446,400 BTC, valued at approximately $27.9 billion.
Recent filings indicate that MicroStrategy’s Bitcoin yield stands at 47.8% quarter-to-date and 74.1% year-to-date. Additionally, just a week prior to its latest announcement, the firm confirmed another Bitcoin purchase worth $509 million.
MicroStrategy’s regular buying of more Bitcoins has elicited positive and negative responses from investors and industry gurus. While some find the company’s strategic and beautiful decision to secure its place in the perspective crypto market, others read it as a bad signal for potential Bitcoin investors. This is worse, according to angel investor Jason Calacanis, who has openly taken on MicroStrategy for the large-scale acquisitions, which he believes makes speculative coins in the market unattractively risky to institutional and retail buyers.
Despite differing opinions, MicroStrategy remains committed to its Bitcoin-centric investment approach. The company’s fundraising and acquisition efforts will be closely monitored as the cryptocurrency market continues to evolve.
