MicroStrategy to Raise $2 Billion More to Buy Bitcoin

MicroStrategy Plans to Raise $2 Billion to Expand Bitcoin Holdings

 MicroStrategy Plans to Raise $2 Billion to Expand Bitcoin Holdings

MicroStrategy, the largest public holder of Bitcoin, has announced plans to raise an additional $2 billion to acquire more of the cryptocurrency. This move is part of the company's ambitious "21/21 Plan," which aims to raise $42 billion—$21 billion from stock sales and $21 billion from loans and other financial instruments—over three years to invest in Bitcoin.

Launched in October 2024, the plan has already enabled the company to acquire 194,180 bitcoins, valued at approximately $19 billion. As of January 3, 2025, MicroStrategy holds 446,400 bitcoins, worth approximately $43.7 billion, with unrealized gains reaching $16 billion at current prices.

To fund the additional $2 billion, MicroStrategy plans to issue perpetual convertible preferred shares, which will have seniority over its Class A common stock. These shares will be underwritten and sold through multiple public offerings, ensuring that the company can continue its aggressive Bitcoin acquisition strategy.

The final decision to proceed with the share issuance and expand the $2 billion investment program will be made during a shareholder meeting in Q1 2025.

MicroStrategy's active issuance and sale of shares have significantly impacted the company's governance. Michael Saylor, the company's Chairman of the Board of Directors and a vocal proponent of Bitcoin, has lost his controlling stake of 51.7%. This change strips Saylor of the ability to make unilateral decisions, placing more power in the hands of other shareholders and the board.

MicroStrategy's relentless pursuit of Bitcoin has made it the largest public holder of the cryptocurrency. By continuing to raise capital for further investments, the company is doubling down on its belief in Bitcoin as a transformative asset. Key highlights of its strategy include:

1. Massive Holdings: With 446,400 bitcoins in its treasury, MicroStrategy accounts for a substantial portion of Bitcoin's finite supply.
2. Unrealized Gains: The company's $43.7 billion Bitcoin portfolio represents an unrealized profit of $16 billion, underscoring the long-term value of its investments.
3. Ongoing Expansion: The additional $2 billion will further cement MicroStrategy's leadership in Bitcoin investment.

While MicroStrategy's Bitcoin-centric approach has delivered significant returns, it also carries risks. The company's financial health is increasingly tied to Bitcoin's volatile price movements, exposing it to potential losses in a bear market. Additionally, the loss of Michael Saylor's sole decision-making authority may lead to shifts in strategy as other stakeholders gain influence.

MicroStrategy's 21/21 Plan reflects its unwavering belief in Bitcoin's potential to reshape global finance. The $2 billion funding initiative, if approved, will enable the company to deepen its commitment to the cryptocurrency, potentially driving further institutional adoption and market growth. However, the evolving governance structure and market dynamics will likely shape the company's future direction.