Microstrategy continues to raise $42 billion to buy BTC for three years

On the morning of January 4, 2025, Microstrategy announced a new 21/21 capital raising plan, with the goal of raising $21 billion from equity and $21 billion from forms such as bond issuance, convertible bonds or preferred stock within the next three years.

Under the plan, the company aims to raise up to $2 billion through perpetual preferred stock offerings.

This class of shares will be rated higher than Class A common stock and may include characteristics such as the ability to convert into common stock, cash dividend payments, and terms that allow share repurchases.

MicroStrategy plans to register this issue with the U.S. Securities and Exchange Commission (SEC) via registration form S-3. Despite this, the number of shares, the specific terms, and the issue price have not yet been determined.

This release aims to strengthen the balance sheet and help the company buy more Bitcoins, in line with a long-term strategy. However, the decision to make is still subject to market conditions, and MicroStrategy reserves the right not to proceed with the release if it deems it inappropriate.

The press release emphasizes that this is not an offer to sell or an invitation to buy any securities. All activities related to the offering will be conducted in accordance with the provisions of the Securities Act of 1933. This announcement is made in accordance with Rule 135 of the Securities Act.

MicroStrategy also makes forward-looking statements, which include projections regarding the release, timing, size, and use of the funds raised.

However, these statements may be influenced by many factors, such as market conditions and other risks mentioned in the company's most recent quarterly report and documents filed with the SEC.

The Company also affirms that forward-looking statements reflect information only as of the present time and has no obligation to update such information in the future.

The last time Microstrategy bought BTC was on December 30, 2024, they announced the purchase of an additional 2,138 BTC at an average price of about $97,837 per BTC. The deal equates to an investment of about $209 million, marking MicroStrategy's eighth consecutive week of buying bitcoin.

Although Microstrategy constantly buys BTC, the price of BTC also rises, making the amount of BTC invested by the company always profitable. On the contrary, the company's stock price continuous decrease after peaking at $421 on November 22, 2024.

This suggests that investors are more careful when it comes to valuing MicroStrategy's stock against the number of BTC it owns.