MicroStrategy Plans $2 Billion Fundraiser to Increase Bitcoin Reserves

Highlights:

• MicroStrategy said that it will raise a new $2 billion capital for more Bitcoin purchases.
• The investment firm will garner the new capital from public underwritten offerings of perpetual preferred stock.
• There is no guarantee that the new offer will stand as several factors will determine the possibilities.

In a January 3 press release, American-based business intelligence and largest corporate holder of Bitcoin (BTC) announced new plans of raising $2 billion for further Bitcoin purchase to strengthen its balance sheet. Notably, the decision to raise the new capital aligns with its 21/21 BTC purchase plan.

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The above buying strategy is a capital-raising plan that will run for three years. The company hopes to raise $42 billion with the strategy. It will raise $21 billion in equity capital and another $21 billion in fixed-income instruments like convertible notes, preferred stock, and debt.

According to the released statement, the new $2 billion capital raise will happen through public underwritten offerings of perpetual preferred stock. The investment firm mentioned that the fresh capital will senior its class A common stock. In addition, it will have features like payment of cash dividends, convertibility to our class A common stock, and provisions allowing for redemptions of shares.

In the press release, the business intelligence platform said that after registering through the form S-3 registration statement, it would file the capital raising proposal with the United States Securities and Exchange Commission (SEC).

MicroStrategy targets up to $2 billion capital raise through public offerings of perpetual preferred stock in the first quarter of 2025. $MSTR https://t.co/x1pbB8ArlH

— Michael Saylor⚡️ (@saylor) January 3, 2025

Offer Price Remains Unknown

Describing price terms for its new offer, MicroStrategy said that it hasn’t confirmed that yet. However, it noted that if it eventually plays out, it would likely be in the first quarter of this year. Per the release, there is no guarantee that the offer must stand.

The document stated:

“The decision whether to proceed with and consummate the Offering is in MicroStrategy’s sole discretion and is subject to market and other conditions. MicroStrategy may choose not to proceed with or consummate the Offering at all.”

Worthy of mention is the fact that the investment firm mentioned that the number of depository shares represents interests in the company’s planned perpetual preferred stock offering. The implication is that depository shares will probably play a huge role in determining if the company will proceed with the offer.

MicroStrategy Issues Warning on Sales Offer

In the same press release, the American-based company warned that its announcement does not contain any offer to sell. Similarly, it does not request offers to buy any security. In its exact wordings, MicroStrategy stated, “Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).”

What’s Next

Since 2020, MicroStrategy has been in the active business of stockpiling Bitcoin. In fact, the company has been very consistent in recent weeks, with BTC’s purchase for eight consecutive weeks. In the most recent purchase, MicroStrategy announced that it bought an additional 2,138 tokens, bringing its total accumulation to 446,400 Bitcoins.

MicroStrategy has acquired 2,138 BTC for ~$209 million at ~$97,837 per bitcoin and has achieved BTC Yield of 47.8% QTD and 74.1% YTD. As of 12/29/2024, we hodl 446,400 $BTC acquired for ~$27.9 billion at ~$62,428 per bitcoin. $MSTR https://t.co/58aXM7g6u2

— Michael Saylor⚡️ (@saylor) December 30, 2024

The newly announced fundraising signifies that the investment firm is not relenting in its purchase efforts. At the same time, it aligns with its co-founder, Michael Saylor’s strong advocacy for Bitcoin as a strategic reserve to escape inflation.

Meanwhile, MicroStrategy’s stock has recovered from the drop experienced towards the end of last year. According to Google Finance data, the stock is up 13.22% today, having added 39.65 to close January 3 at $339.66. Similarly, Bitcoin spiked by 1.6% in the past 24 hours, bringing its selling price to about $98,100.

2024 was a good year for $BTC and $MSTR. 🚀 https://t.co/x0xlCNEK44

— Michael Saylor⚡️ (@saylor) January 2, 2025

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