MicroStrategy, the business intelligence company that’s made big bets on Bitcoin, is at it again.
The company is calling a special shareholder meeting to discuss plans that will increase its ability to buy more bitcoin. With a goal to buy $42 billion in bitcoin over the next three years, MicroStrategy is going all in on Bitcoin.
At the center of MicroStrategy’s plans is the “21/21 Plan”, which will raise $21 billion through equity and $21 billion in fixed income securities. This will fund the company’s bitcoin buying spree.
With the aim of accelerating the 21/21 Plan, MicroStrategy is proposing to increase its authorized shares dramatically. The company wants to increase Class A common stock from 330 million shares to 10.33 billion shares. And increase authorized preferred stock from 5 million shares to over 1 billion.
This initiative will effectively result in a staggering share dilution of 97%, but will give MicroStrategy more flexibility to raise capital in the future.
Executive Chairman Michael Saylor said:
“The proposals we are asking you to consider reflect a new chapter in our evolution as a Bitcoin Treasury Company and our ambitious goals for the future.”
Related: Michael Saylor Says MicroStrategy Will Be The Leading Bitcoin Bank
The company has been buying bitcoin since 2020 and is now the largest corporate bitcoin holder.
As of December 22, MicroStrategy owns approximately 444,262 bitcoin, worth around $43.5 billion. Those coins were bought at an average price of $62,257 per bitcoin, for a total of $27.7 billion.
According to a recent filing with the U.S. Securities and Exchange Commission (SEC), the increased share authorizations will not dilute the company immediately but will provide a framework to phase in.
The shareholder meeting will be virtual and will also include votes on other items. Those include changes to the 2023 Equity Incentive Plan which will grant automatic equity to new directors. This will align the Board’s compensation with the company’s long term Bitcoin strategy.
2024 has been a record year for MicroStrategy. The company’s stock is up over 420% year to date, mostly due to bitcoin’s rally. MicroStrategy’s market cap is now $82 billion, 80 times what it was in 2020.
In December 2024 alone, MicroStrategy bought 42,162 bitcoin, worth over $4 billion at current prices.
Despite all the success MicroStrategy has had, they’ve had challenges too, like stock volatility and market fluctuations.
Despite their recent listing on Nasdaq-100, the shares (MSTR) recently dipped, dropping from an all-time high of $534.99 to $358.18 on Wednesday morning. That’s in line with the broader digital asset market, where bitcoin itself has been fluctuating.
But Saylor is still bullish. He’s even suggested the US should have a bitcoin reserve to manage their $36 trillion national debt.
Some believe this recent decision is a recipe for MicroStrategy’s destruction. Saylor, however, argues otherwise. He said the debt can be paid with stocks, even if “bitcoin goes to a penny”.
MicroStrategy’s next earnings report will be released on February 2, 2025. In the meantime, the special shareholder meeting will be the big event. Shareholders will vote on the proposed share dilutions and other initiatives to keep MicroStrategy the leader in Bitcoin investment.
“We have been executing on our 21/21 Plan significantly faster than originally anticipated,” the company said in their SEC filing. They’ve already raised $13 billion through stock sales and $3 billion through convertible bond offerings.
The result of these plans remains to be seen. Regardless, MicroStrategy is changing the game for corporate bitcoin investment, and, for now, they’re leading the way.
