Will MicroStrategy's latest BTC purchase plan lead to a plunge in MSTR stock price?
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So far, MicroStrategy's various financing activities have received a positive response from investors, all aimed at increasing the funds available for purchasing more Bitcoin.
However, if the plan to increase the number of common shares by 10 billion and preferred shares by 1 billion is approved, this move may be a bit excessive, as it would significantly dilute MSTR's equity. In fact, the plan calls for increasing the number of shares by 30 times.
On the other hand, even if the so-called 21/21 plan (a plan to raise $42 billion through equity and fixed income assets to buy more Bitcoin) causes the MSTR stock price to fall below $100, it may not necessarily be a harmful development.
Ultimately, the planned issuance and its consequences could be positive or negative for the company and its stakeholders, depending on how high the BTC price can rise and when the current bull market cycle in the cryptocurrency market ends.
As of the time of writing on December 24, Bitcoin is facing strong resistance, having fallen from a historic high (ATH) of over $108,000 to still an impressive $94,000 within about a week.
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