Michael Saylor Announces Plans to Raise $21 billion from Stock Sale

• Michael
  Saylor
  announced
  plans
  to
  raise
  funds
  to
  buy
  Bitcoin
  by
  issuing
  and
  selling
  $21
  billion
  worth
  of
  MicroStrategy
  shares.
• The
  equity
  raise
  is
  part
  of
  a
  larger
  plan
  to
  raise
  $42
  billion
  for
  Bitcoin
  purchases
  over
  the
  next
  three
  years.
• The
  at-the-market
  equity
  offering
  will
  dilute
  current
  shares
  by
  42%
  of
  their
  capitalisation,
  which
  currently
  stands
  at
  $50
  billion.

Michael
Saylor,
co-founder
and
Chairman
of
MicroStrategy,
announced
plans
to
raise
$21
billion
to
buy
more
Bitcoin
by
offering
more
MSTR
shares
at
prevailing
market
prices.
The
amount
of
shares
issued
would
dilute
the
value
of
existing
shares
held
by
current
shareholders.

Usually,
this
level
of
dilution
would
lead
to
a
significant
discount
in
stock
price
to
retain
the
same
overall
value,
which
is
manifest
by
a
fall
in
stock
prices.

However,
MicroStrategy’s
stock
price
has
not
fallen
significantly
since
the
announcement,
due
largely
to
its
cohort
of
shareholders,
the
performance
of
its
stock
since
202,
and
its
Bitcoin
holding.

An
overview
of
MicroStrategy’s
Bitcoin
purchases

MicroStrategy
began
buying
Bitcoin
in
2020,
at
a
time
when
adding
Bitcoin
to
corporate
balance
sheets
was
not
as
accepted
as
it
is
today.
Over
the
last
four
years,
the
company
has
issued
corporate
debt
notes
to
fund
its
Bitcoin
purchases
and
currently
holds
252,220
Bitcoin
(roughly
1%
of
the
total
Bitcoins
supply)
worth
roughly
$17.6
billion.

The
company’s
most
recent
purchase
was
in
September
2024,
when
it
bought
7,420
Bitcoin
at
an
average
price
of
$61,750
per
BTC,
totalling
$458.2
million,
which
it
raised
by
offering
senior
debt
notes.

Shareholders
hope
despite
dilution
concerns

MicroStrategy
is
in
a
unique
position
because
the
size
of
its
Bitcoin
holdings
creates
a
correlation
between
Bitcoin’s
price
performance
and
that
of
its
stock.
With
each
major
Bitcoin
purchase,
MSTR
moves
closer
to
being
a
quasi-Bitcoin
spot
ETF.

However,
the
total
cost
of
MicroStrategy’s
Bitcoin
purchases
hovers
around
$9.9
billion
while
the
current
value
of
the
company’s
holding
is
95%
higher
than
the
cost
price,
a
performance
that
has
fueled
the
company’s
stock
rally.

MSTR,
which
traded
around
$13
in
2020
when
MicroStrategy
began
its
Bitcoin
buying
strategy,
is
currently
trading
at
$244.50.
The
share
price
has
grown
250%
this
year
alone,
outpacing
Bitcoin’s
60%
performance.

MicroStrategy’s
capital
plans
and
Saylor’s
projections

Michel
Saylor’s
plan
to
buy
$42
billion
worth
of
Bitcoin
over
the
next
three
years,
fueled
by
a
$21
billion
equity
raise
and
debt
notes,
could
increase
the
company’s
Bitcoin
holdings
by
threefold,
depending
on
the
average
buy
price.

Saylor
expects
Bitcoin
to
reach
between
$3
million
and
$49
million
in
the
next
20
years
and
is
therefore
building
MicroStrategy
into
a
Bitcoin
bank.

Bitcoin
trades
at
$70,105
as
of
publishing
after
recently
testing
the
all-time
highs
of
$73,000
reached
in
March
2024.