The company, which has maintained its BTC holdings steady since mid-September, is planning to divide its capital raise equally, with $21 billion in equity and $21 billion in debt offerings. The plan, coined the “21/21 Plan,” could add substantial Bitcoin reserves to MicroStrategy’s portfolio, aligning with Executive Chairman Michael Saylor’s vision of the company as a “Bitcoin Treasury.”
CEO and President Phong Le emphasized that the plan is rooted in leveraging Bitcoin as a “treasury reserve asset” to amplify the company’s BTC yield and returns. “As a Bitcoin Treasury Company, we aim to use this capital to buy more Bitcoin, positioning us to achieve higher BTC Yield,” Le stated in the company’s third-quarter earnings report.
MicroStrategy’s recent Bitcoin investment occurred in September when it purchased 7,420 BTC for $458.2 million, boosting its total BTC holdings to 252,220, purchased at an average price of $39,266 per Bitcoin. With Bitcoin’s price at $72,000 as of this report, MicroStrategy’s Bitcoin stash is valued at over $18 billion. Additionally, the company holds $891.3 million in cash, providing ample “dry powder” for future acquisitions.
Source: X
The firm revised its target “BTC Yield” range to 6%-10%, up from the previous 4%-8%, aiming for an aggressive yield performance that executives consider a crucial KPI. In the third quarter alone, MicroStrategy reported a BTC Yield of 17.8%, showcasing the company’s efficient Bitcoin acquisition and performance strategies.
The ambitious fundraising endeavor could buy roughly 578,586 BTC at current prices, approximately 2.7% of Bitcoin’s total supply. This announcement sparked varied reactions within the crypto community. BitcoinMiningStockGuy, a prominent analyst, expressed optimism, noting that $21 billion is equivalent to the combined market cap of all public Bitcoin miners. Meanwhile, volatility researcher Ryan McGinnis called the plan “escape velocity,” positioning MicroStrategy as potentially unrivaled among publicly traded companies, perhaps even against some countries.
This move follows the completion of MicroStrategy’s $1.01 billion convertible senior notes offering in September, which included a 0.625% interest rate and matures in 2028. Part of the proceeds from this private offering, targeted at institutional investors, was allocated to Bitcoin acquisitions.
Shares Down But 250% Up YTD
Since MicroStrategy’s inception, its value has surged over 1,500%—outperforming tech giant Microsoft’s 1,460% gain over the same period, further reinforcing its role as a unique financial powerhouse in the cryptocurrency space.
MicroStrategy’s shares, while down 10% in after-hours trading following the announcement, remain 250% higher year-to-date, underscoring investor confidence in its audacious Bitcoin-centric growth strategy.
MicroStrategy Targets $150 Billion in Bitcoin Holdings
Michael Saylor envisions MicroStrategy becoming a Bitcoin bank, focusing on creating Bitcoin-based financial products. These offerings would include equities, convertibles, fixed-income instruments, and preferred shares, all supported by a large reserve of bitcoin.
“This is the most valuable asset in the world. The endgame is to be the leading Bitcoin bank, or merchant bank, or you could call it a Bitcoin finance company. If we end up with $20bn of converts, $20bn of preferred stock, $10bn of debt and say $50bn billion of some kind of debt instrument and structures instrument, we’ll have $100-$150bn of bitcoin,” said Saylor.
