MicroStrategy Unveils $42 Billion Plan to Expand Bitcoin Holdings

Thursday, October 31, 2024, 10:32:00 AM

MicroStrategy (Nasdaq: MSTR), the world’s largest corporate bitcoin holder, has announced an ambitious three-year plan to raise $42 billion for further bitcoin acquisitions. The company’s new “21/21 Plan” aims to secure equal amounts of $21 billion in equity and fixed-income securities to expand its cryptocurrency holdings.

“Our focus remains to increase value generated to our shareholders by leveraging the digital transformation of capital,” said CEO Phong Le. “We plan to use the additional capital to buy more bitcoin as a treasury reserve asset in a manner that will allow us to achieve higher BTC Yield.”

Today, we are announcing a strategic goal of raising $42 billion of capital over the next 3 years, comprised of $21 billion of equity and $21 billion of fixed income securities, which we refer to as our “21/21 Plan.”

As a Bitcoin Treasury Company, we plan to use the additional…
— db (@tier10k) October 30, 2024

The company’s bitcoin position grew in Q3 2024, with holdings increasing by 11% to 252,220 bitcoins. As of September 30, these holdings had a market value of $16.007 billion, reflecting bitcoin’s price of $63,463. The company’s average purchase price stands at $39,266 per bitcoin, with a total investment of $9.904 billion.

CFO Andrew Kang reported strong performance in the company’s bitcoin strategy: “Q3 2024 was another transformational quarter for MicroStrategy, as we raised $2.1 billion in equity and debt. Our proven track record of using intelligent leverage serves as the foundation to execute on our strategic three-year 21/21 Plan.” The company achieved a year-to-date BTC Yield of 17.8% and has revised its long-term target to achieve an annual BTC Yield of 6% to 10% between 2025 and 2027.

During the quarter, MicroStrategy issued $1.010 billion in convertible notes and sold over 8 million shares of class A common stock, generating approximately $1.1 billion in net proceeds. The company reported digital asset impairment losses of $412.1 million for the quarter, significantly higher than the $33.6 million reported in the same period last year.

To support its expansion plans, MicroStrategy also announced a new at-the-market equity offering program that could raise up to $21 billion through the sale of class A common stock, marking the first step in implementing its ambitious three-year bitcoin acquisition strategy.

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