MicroStrategy To Raise $42 Billion To Boost Bitcoin Holdings

MicroStrategy announced plans to raise $42 billion over the next three years to increase its Bitcoin reserves.

MicroStrategy announces $42 billion capital plan including $21 billion ATM equity offering and a target of raising $21 billion in fixed-income securities. Join us at 5pm ET as we discuss our quarterly results and #Bitcoin Treasury Company plans. $MSTR https://t.co/eXYELbN1Dm
— Michael Saylor⚡️ (@saylor) October 30, 2024

The strategy, termed the “21/21 plan,” will involve raising $21 billion through equity and an additional $21 billion via fixed-income securities, as detailed in a company statement on October 30th.

If current Bitcoin prices hold, the planned $42 billion would acquire approximately 578,586 Bitcoin, or around 2.7% of Bitcoin’s total supply.

Objective to Increase Bitcoin Returns

MicroStrategy’s CEO, Phong Le, stated that the initiative aims to increase returns from the company’s Bitcoin assets.

“As a Bitcoin Treasury Company, 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,” Phong stated.

According to MicroStrategy, its current Bitcoin yield stands at 17.8% year-to-date, with a target range of 6% to 10% annually from 2025 to 2027.

Quant researcher Ryan McGinnis referred to the plan as reaching “escape velocity,” pointing to the growing distinction between MicroStrategy and other public companies.

“But, what if, another operating company comes along and buys more bitcoin than MSTR?”

It’s over. This is escape velocity. The only question is how wide will the gap be between $MSTR, every other PubCo on Earth combined, and even countries. https://t.co/ltJdiIPdTr
— Ryan (@ryQuant) October 30, 2024

This announcement follows MicroStrategy’s recent $1.01 billion offering of 0.625% convertible senior notes due in 2028, with a portion of the proceeds allocated to Bitcoin purchases.

Completed on September 19th, the private offering allowed for conversion into cash or MicroStrategy shares and targeted institutional investors.

Additionally, MicroStrategy’s stock has increased over 1,500% since 1999, surpassing Microsoft’s 1,460% gains during the same period.