U.S. software development company MicroStrategy has proposed to increase its Class A common stock and preferred stock shares to better execute its Bitcoin strategy. Shareholders will vote on this proposal next year.
According to the 14A proxy statement submitted by MicroStrategy to the U.S. Securities and Exchange Commission (SEC), the proposal plans to increase Class A common stock from 330 million shares to 10.33 billion shares, and preferred stock from 5 million shares to 1 billion shares. The company stated that the proposed share issuance will support its '21/21 Plan'.
The goal of the 21/21 Plan is to raise $42 billion in funding over the next three years, of which $21 billion will be raised through equity and another $21 billion through fixed-income securities. The plan aims to support MicroStrategy's further Bitcoin purchases as part of its financial reserve strategy.
MicroStrategy's latest statement also detailed other proposals from the company, including a new equity incentive plan that will grant automatic equity awards to new directors.
In an 8-K report submitted last Friday, MicroStrategy increased the number of board members from 6 to 9, with new members including Brian Brooks, Jane Dietze, and Gregg Winiarski. Brooks served as CEO of Binance for three months in 2021, while Dietze has been a member of the Galaxy Digital board since 2022.
MicroStrategy wrote in a statement: "These proposals we hope you will consider reflect a new chapter in our evolution as a Bitcoin treasury company, as well as our grand ambitions for the future."
The specific date of the special shareholder meeting to vote on the proposal has not been announced, but it is scheduled to be held in 2025.
MicroStrategy has been continuously accumulating Bitcoin since 2020 and has become the publicly traded company with the largest Bitcoin holdings in the world. In addition to the statement mentioned above, the company also announced yesterday that it had increased its holdings by approximately 5,262 Bitcoins. As of December 22, 2024, MicroStrategy and its subsidiaries hold approximately 444,262 Bitcoins, with a total cost of about $27.7 billion and an average purchase price of about $62,257.
While news of MicroStrategy purchasing Bitcoin usually drives its stock price up, the company's stock price fell 8.78% to $332.23 at Monday's close, down about 38% from the historic high set in November. Nevertheless, MicroStrategy's stock price has still surged by as much as 450% over the past year.
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