MicroStrategy, the largest publicly traded corporate holder of Bitcoin, has announced a substantial $42 billion capital-raising plan to further increase its Bitcoin reserves over the next three years. The company’s strategy, referred to as the “21/21 Plan,” aims to raise $21 billion through an at-the-market (ATM) equity offering and another $21 billion through fixed-income securities, according to MicroStrategy CEO Phong Le. The company plans to use these funds to purchase additional Bitcoin, maintaining its role as a “Bitcoin Treasury Company.”
MicroStrategy announces $42 billion capital plan including $21 billion ATM equity offering and a target of raising $21 billion in fixed-income securities. Join us at 5pm ET as we discuss our quarterly results and #Bitcoin Treasury Company plans. $MSTR https://t.co/eXYELbN1Dm
— Michael Saylor⚡️ (@saylor) October 30, 2024
In an official statement released Wednesday, CEO Phong Le said the 21/21 Plan will help the company increase its Bitcoin holdings and “achieve higher BTC Yield.” MicroStrategy currently holds 252,220 bitcoins, valued at approximately $18.2 billion. Le emphasized the company’s ongoing commitment to Bitcoin, adding that it intends to use the new capital “to buy more Bitcoin as a treasury reserve asset” to enhance shareholder value.
Despite the ambitious plan, MicroStrategy reported mixed third-quarter financial results, which revealed a 10% year-over-year revenue decline to $116.1 million, falling short of market expectations. The company’s net loss increased significantly to $340 million, up from $143.4 million in the same quarter last year. Chief Financial Officer Andrew Kang highlighted that, despite the losses, the company successfully raised $2.1 billion in equity and debt during the quarter, contributing to the foundation for the 21/21 Plan.
Looking forward, the company has set an annual BTC Yield target of 6% to 10% from 2025 to 2027, underscoring its confidence in Bitcoin as a core asset. However, the company has faced fluctuating returns in recent quarters, with Bitcoin trading around $72,209, following a 9% increase over the past week.
In its latest strategic move, MicroStrategy’s 21/21 Plan underscores its commitment to further integrating Bitcoin into its financial strategy, aiming to leverage Bitcoin’s potential as both a reserve asset and a value generator for shareholders.
