MicroStrategy has attracted attention with its 332% stock gain through 2024. The company is planning a $10 billion new stock issue. The impact of this plan is being watched closely by market analysts and existing shareholders.
In 2024, MicroStrategy attracted attention by focusing on Bitcoin purchases and broke a record by accumulating a total of 446,400 Bitcoins by the end of the year. In parallel with the increase in the price of Bitcoin, the company's shares also experienced a significant increase and gained 332% in value. However, the company's $ 10 billion share issuance plan draws attention with its potential to affect market dynamics.
MicroStrategy shares fell 40% from their peak of $473 to fall below $300 by the end of the year. The decline is seen as a reflection of the selling pressure in the markets despite the company’s Bitcoin-focused strategy. The company continued its commitment to digital assets by purchasing an additional 2,138 Bitcoins during the year. However, the stock issuance plan raised concerns about diluting the shares of existing shareholders.
Analysts predict that MicroStrategy’s MSTR shares may lose value following the stock issuance. 21st Capital CEO Sino G. commented on this issue, “MicroStrategy is not affected by declines in Bitcoin prices. However, sideways or downward trends could create a significant decline in the shares.”
Strategy and Future Prospects
MicroStrategy has announced a $10 billion capital increase plan led by Michael Saylor, and this plan is expected to be approved by shareholders. The company’s move is seen as a move to increase Bitcoin prices. However, there are also concerns that existing shareholders will be diluted due to the stock issuance.
MicroStrategy’s strategy aims to create a cycle of capital raising and Bitcoin purchases. The company raises capital by taking advantage of low interest rates and uses this capital to buy Bitcoin. This Bitcoin is then financed by issuing new shares. This strategy aims to make the company a bigger player in the Bitcoin market.
But the impact of this approach on stocks can be complex. Analysts say stock prices are closely tied to Bitcoin’s price movements and market sentiment. This strategy can have a major impact on a company’s market value and shareholders’ long-term returns.