MicroStrategy is getting ready for an important shareholder vote to decide if the company can raise more money to support its big Bitcoin plans. The company wants to raise $42 billion over the next three years to strengthen its position as a leader in using Bitcoin.
MicroStrategy is set up for an important shareholder vote. It announced a meeting with its shareholders after purchasing $516 million worth of Bitcoins. The meeting is to decide if the company can raise funds for its big Bitcoin Strategy plan, called the “21/21 Plan.”
The plan is to raise $21 billion by equity financing and another $21 billion by issuing bonds over the next three years.
MicroStrategy SEC filing. Source: X MicroStrategy’s 21/21 plan
The company started its Bitcoin journey in 2020 when it made the cryptocurrency a key part of its treasury strategy. Since then, MicroStrategy has accumulated over 444,000 BTC, worth $42 billion. This shift has increased the company’s market value gradually, growing it from $1.1 billion to $82 billion.
To achieve its goals, the company has proposed increasing the number of authorized Class A shares from 330 million to 10.33 billion and also raising the number of preferred shares from 5 million to 1.05 billion.
These changes will allow greater flexibility to raise funds. The company has also proposed changes to its 2023 Equity Incentive Plan, by introducing automatic equity awards for newly appointed directors to align them with its Bitcoin-focused vision.
Michael Saylor, MicroStrategy’s executive chairman, has been the main force behind its Bitcoin strategy. He believes this approach is essential for long-term success. Under his leadership, the company has remained committed to Bitcoin, even during periods of market decline and rise.
Most recently, MicroStrategy sold $561 million worth of shares to acquire an additional 5,262 BTC, showing its strong trust in Bitcoin as a safe option to hold value.
Investor concerns
The proposals have gotten mixed reactions from investors. While some point out the big profits made from the Bitcoin plan, such as a 477% rise in the company’s stock price over the past year, others are cautious about potential risks.
A concern is that issuing more shares may reduce the percentage of current shareholders, which is raising questions about how the company will balance long-term goals with the interests of its investors.
Those who support the plan believe that the Bitcoin strategy has already made MicroStrategy more valuable and helped it to lead the way in corporate use of Bitcoin. They think the changes will help the company’s future opportunities and stay at the top of the Bitcoin world.
There is also concern about the company crumbling into bankruptcy because of Bitcoin’s volatility. But the point is we may never see that scenario as Young said that MicroStrategy could only face bankruptcy if Bitcoin’s price falls to $16,500.
He also pointed out that the company is holding around $46 billion worth of Bitcoin, but there is only $7 billion in debt. So it’s impossible to get into bankruptcy as some are concerned.
Despite these, Michael Saylor also suggested that a Bitcoin reserve could help the US with its huge national debt. He thinks the current political environment is also cordial with the Bitcoin agenda.
As the US develops into a pro-crypto industrial environment, he strongly believes that there will be more regulations to help MicroStrategy achieve its goals and a Bitcoin reserve would be a great launchpad.
The upcoming vote will be an important moment for MicroStrategy. If the shareholders approve the plan, the company will get the resources to carry out its 21/21 plan.
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