MicroStrategy plans $42B raise to boost Bitcoin holdings

Full story: https://grafa.com/news/cryptocurrencies-microstrategy-plans--42b-raise-to-boost-bitcoin-holdings-298183

MicroStrategy (MSTR) unveiled a new capital strategy on Wednesday, aiming to raise $42 billion over the next three years to increase its Bitcoin (CRYPTO:BTC) holdings and enhance shareholder returns. 

According to the company’s Q3 earnings report, the “21/21 Plan” consists of generating $21 billion through ATM equity sales and another $21 billion from fixed-income securities. 

“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,” stated Phong Le, President and CEO of MicroStrategy. 

The firm has set ambitious new targets for annual Bitcoin yields, ranging between 6% and 10%, with the plan contingent on well-timed capital raises. 

MicroStrategy reported a $412 million impairment loss on its digital assets in the third quarter. 

This reflects the company’s accounting approach, which has yet to shift to fair value accounting, affecting the valuation of its holdings. 

Michael Saylor, the company’s executive chairman, has been vocal about his vision for MicroStrategy’s future. 

Earlier this month, Saylor expressed his ambition to transform the company into a trillion-dollar Bitcoin-focused financial institution. 

This bold claim contributed to a surge in MSTR’s stock price, reaching its highest levels in two decades. 

According to the company, the decision to expand Bitcoin reserves aims to provide improved financial performance and shareholder value by optimising Bitcoin holdings. 

MicroStrategy continues to position itself as a major corporate investor in the digital currency sector, demonstrating strong confidence in Bitcoin’s long-term value.

At the time of reporting, the Bitcoin price was $72,326.52.