MicroStrategy, the enterprise software giant operating out of Tysons Corner, Virginia, continues to be in the spotlight with its persistent Bitcoin purchasing streak. Just recently, for the twelfth week in a row, the company made headlines again by acquiring more Bitcoin. From January 21 to January 26, MicroStrategy spent a staggering $1.1 billion on Bitcoin, as revealed in a filing with the US Securities and Exchange Commission (SEC).
With this latest acquisition, MicroStrategy’s Bitcoin holdings have soared to approximately 471,107 BTC, worth around $30.4 billion. This represents more than 2% of the total Bitcoin that will ever be available.
MicroStrategy Aims to Surpass 500,000 BTC in Holdings
To further its Bitcoin ambitions, MicroStrategy has unveiled plans to raise $250 million through the sale of perpetual preferred stock, offering an attractive 8% fixed coupon. Although the finer details are yet to be made public, the stock will have a conversion price of $1,000. This initiative is designed to expand the company’s significant Bitcoin reserves, edging closer to the milestone of 500,000 BTC.
MicroStrategy has deployed various fundraising methods, including at-the-market stock sales and convertible debt offerings, with an aim to gather a whopping $42 billion in capital by the year 2027. Over the past year, the company’s stock has experienced a remarkable ascent, climbing nearly 600%, though it recently took a slight dip by about 1.4% to $348.65 in early trading this Monday. Meanwhile, Bitcoin also saw a downturn, dropping around 2.5% to $101,500.
Focused on Future Capital Growth
In a move aimed at enhancing financial flexibility, MicroStrategy recently announced its plan to redeem over $1 billion of its 0% Convertible Senior Notes due in 2027 ahead of schedule, with a target redemption date set for February 24. Benchmark analyst Mark Palmer highlights this strategy as a means to simplify financial obligations, enabling investors to concentrate on MicroStrategy’s core operations without being distracted by potential financial hurdles.
By redeeming these notes early, MicroStrategy could open doors to issuing new convertible debt with lengthier maturities, thus broadening its capital-raising possibilities. The company also plans to offer about 2.5 million shares of Series A perpetual strike preferred stock, which will be prioritized over its Class A common stock, offering regular quarterly dividends starting March 31.
Moreover, shareholder approval has ushered in a significant increase in authorized shares, expanding from 330 million to a whopping 10.3 billion for Class A common stock. This expansion aligns with the firm’s continuous push to preserve liquidity and support its aggressive Bitcoin procurement strategy without selling any of its holdings.
MicroStrategy’s co-founder, Saylor, emphasized the company’s strong liquidity position. He confidently stated, "We’ve had and expect to continue to have abundant access to liquidity through our capital markets activities and cash flows from operations." Reassuring investors, he confirmed that MicroStrategy has no urge to offload any of its Bitcoin to fulfill interest obligations, reiterating the company’s steadfast attachment to its cryptocurrency strategy.
Feature image sourced from DALL-E, chart courtesy of TradingView.com
