Michael Saylor’s MicroStrategy Announces $42 Billion Plan To Increase Bitcoin Holdings

Updated: 31 October 2024

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Michael Saylor’s MicroStrategy has announced an ambitious plan to raise $42 billion over the next three years to expand its Bitcoin holdings.

The strategy, named the “21/21 Plan,” aims to secure $21 billion through equity and an additional $21 billion through debt, underscoring Saylor’s ongoing commitment to Bitcoin as a key corporate asset.

“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,” said president and CEO Phong Le, in the company’s third-quarter earnings statement.

🟠#BTC

MicroStrategy has announced an ambitious plan to raise $42 billion over the next three years, split evenly between $21 billion in equity and $21 billion in fixed-income securities. The company intends to use this capital to increase its Bitcoin holdings as a treasury pic.twitter.com/f2MEcnevoQ

— Fortune Tells (@online0705) October 31, 2024

MicroStrategy, the largest corporate holder of Bitcoin, said in mid-September that it had purchased an additional 7,420 BTC for $458.2 million, bringing its total holdings to 252,220 BTC. Acquired at an average price of $39,266 per coin, these holdings are now worth over $18.1 billion, with Bitcoin trading at around $72,000.

MicroStrategy Shares Drop Amid Earnings Miss, Bitcoin Premium Concerns

MicroStrategy’s shares dropped by about 5.9% after its third-quarter earnings came in below expectations,

MicroStrategy reported that revenue plunged 10.3% to $116.1 million in Q3, landing about 5.2% below analysts’ forecasts. Despite that, it said it saw a 5.1% return on its Bitcoin (BTC) holdings and posted an overall gross profit of $81.7 million, maintaining a 70.4% gross margin, it said.

This update comes as MicroStrategy continues its shift toward branding itself as a “Bitcoin development company.”

MicroStrategy $MSTR falls 7.5% after Q3 earnings and revenue miss.

“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… pic.twitter.com/EvQxN91O1M

— TipRanks (@TipRanks) October 30, 2024

Still, Steno Research recently warned that MicroStrategy’s current 300% premium over its Bitcoin holdings may not be sustainable with the launch of spot Bitcoin ETFs and options trading on the new investment vehicles, which offer investors simpler and cheaper ways to access Bitcoin.

Analyst Mads Eberhardt predicts that the premium could fall below 200%, similar to where it stood in previous bull markets.

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