MicroStrategy has initiated plans to raise an unprecedented $42 billion through share sales and fixed-income offerings to bolster its Bitcoin holdings.
The Virginia-based company, co-founded by Bitcoin advocate Michael Saylor, aims to fund this capital infusion over the next three years to continue its ambitious strategy of converting cash reserves into cryptocurrency assets.
MicroStrategy Plans To Raise $42 Billion for Bitcoin Holdings
The software company, headquartered in Tysons Corner, has engaged several major banks to conduct this fundraising through an “at-the-market” (ATM) stock offering, targeting $21 billion in equity.
Additionally, MicroStrategy plans to raise another $21 billion through the sale of fixed-income securities, diversifying its capital sources and building on its aggressive approach to amassing Bitcoin.
ATM programs allow companies to issue shares on an as-needed basis, with the option to pull back or adjust depending on market conditions, though MicroStrategy has not guaranteed it will reach the full $42 billion target immediately.
This isn’t the first time MicroStrategy has turned to equity and debt markets to fund its Bitcoin treasury. Over the past year, it raised significant funds through the sale of convertible senior notes and stock, with proceeds funnelled into purchasing Bitcoin.
As of mid-September, MicroStrategy’s Bitcoin holdings had reached 252,220 BTC, acquired at an average price of $39,266 per coin, totalling $9.9 billion. With Bitcoin currently trading around $72,000, these holdings are worth over $18 billion, demonstrating substantial growth in value since the initial investments.
MicroStrategy’s Growing Bitcoin Holdings and Losses
The company’s decision to pursue additional Bitcoin investments highlights its belief in the asset’s long-term value. Phong Le, MicroStrategy’s President and CEO, reiterated this commitment, stating, “Our focus remains to increase the value generated to our shareholders by leveraging the digital transformation of capital.”
Emphasizing the company’s role as a “Bitcoin treasury,” Le confirmed that newly raised capital would be allocated toward further Bitcoin purchases, positioning the cryptocurrency as a core treasury reserve asset for the company.
While MicroStrategy’s embrace of Bitcoin has garnered significant attention, it has also introduced volatility to its financial results. The firm reported a third consecutive quarterly loss, impacted by an impairment charge on its Bitcoin holdings, which remain valued at around $18 billion.
Its company generated $116.1 million in revenue for the third quarter, a 10% decline. That was less than the $122.5 million analysts had predicted. In comparison to the same quarter last year, when the net loss was $143.4 million, this year it was $340 million.
MicroStrategy’s aggressive Bitcoin investment strategy has placed it at the forefront of corporate cryptocurrency adoption, with Saylor often vocal about Bitcoin’s potential as a store of value.
By continually expanding its Bitcoin holdings, MicroStrategy not only diversifies its assets but also aligns itself with the growing digital asset trend, which Saylor and the leadership team believe will continue to redefine treasury management in the tech sector.