- MicroStrategy has announced a bold plan, the “21/21 plan,” to raise US$42 billion over the next three years to expand its Bitcoin holdings, with US$21 billion from equity and US$21 billion from fixed-income securities.
- If successful, the raised capital would allow MicroStrategy to acquire around 578,586 BTC, equivalent to approximately 2.7% of Bitcoin’s total supply.
- Despite facing a US$340 million net loss this quarter due to a US$412 million impairment charge on its US$18 billion Bitcoin portfolio, MicroStrategy’s stock has outperformed major firms like Nvidia, with a nearly 300% gain this year.
Michael Saylor is at it again…
This man is either obsessed or has an enviable conviction, as his company, MicroStrategy, announced an ambitious plan to raise US$42B (AU$63.8B) in capital over the next three years to increase its Bitcoin holdings.
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Known as the “21/21 plan”, this initiative will involve raising US$21B (AU$31.9B) in equity and US$21B through fixed-income securities, according to a statement released by the company on October 30.
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.
Phong Le, President and Chief Executive Officer of MicroStrategyIf fully realised, this capital could translate to the purchase of approximately 578,586 BTC, which represents around 2.7% of Bitcoin’s total supply.
Don’t Stop Believing
This comes despite MicroStrategy posting a third consecutive quarterly loss, largely driven by a US$412M (AU$612M) impairment charge on its US$18B (AU$27B) BTC portfolio. The company reported third-quarter revenue of US$116.1M (AU$176.4M) from its software operations, down 10% from last year and missing analyst expectations of US$122.5M (AU$186.3M).
The quarter’s net loss reached US$340M (AU$517M), compared to US$143M (AU$217M) in the same period last year.
Despite these financial challenges, MicroStrategy has managed impressive stock performance, outperforming even tech leader Nvidia over the past two years. As Bitcoin’s price approaches its all-time high, MicroStrategy’s shares have surged nearly 300% this year—outpacing Bitcoin’s own 70% gain.
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Since 2020, the company has relied on methods like convertible notes to finance additional Bitcoin purchases, positioning itself as the largest corporate holder of the cryptocurrency.
Earlier this year, MicroStrategy took steps to support its acquisition strategy, completing a US$1.01B (AU$1.54B) offering of convertible senior notes in September. Due in 2028 and carrying a 0.625% interest rate, these notes were aimed at institutional investors and allow for conversion to cash or MicroStrategy stock. Funds from this offering are also being directed toward Bitcoin purchases.
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