Business analytics software firm MicroStrategy has expanded its board, adding three new directors, including former Binance US CEO Brian Brooks. The appointment became public through the company filing of an 8-K with the Securities and Exchange Commission.
With the move, MicroStrategy now has nine board members instead of the previous six. In addition to Brooks, the Bitcoin treasury-denominated firm also added Jane Dietze and Gregg Winiarksi to its board. Dietze is the chief investment officer for Brown University, while Winiarksi is the chief legal officer of Fanatics Holding.
However, Brooks’ appointment has garnered the most attention due to his antecedents in the crypto and financial markets. Brooks, currently the chairman and CEO of Meridian Capital, has served in several key roles before, including being the Acting Comptroller of Currency and the Chief legal office of Coinbase.
Many consider the addition of the three new executives to the MicroStrategy board a bullish sign for the company, noting their experience, background, and contributions in the investment and corporate law fields. Coindesk senior analyst James Van Straten describes the news as significant, stating: “Brian Brooks is huge.”
MicroStrategy is planning to change its capital raise strategy
Interestingly, the announcement of new board members comes after the firm announced plans to change its strategy for raising capital for its Bitcoin acquisitions. MicroStrategy chairman Michael Saylor said on Bloomberg TV that once it exhausts its current fundraising, MicroStrategy wants to focus more on using fixed-income securities like convertibles to raise capital for future Bitcoin purchases.
The company has been raising capital using a combination of convertible bond sales and the issuance of new equity. This has allowed the company to raise over $20 billion of the $42 billion it has planned to spend on Bitcoin acquisition over the next three years. MicroStrategy has already sold two-thirds of its equity and about one-third of its planned convertible debt.
However, Saylor believes that most of the convertible bonds it has issued are more of equity than debts, suggesting he is concerned about overdiluting its equity.
He said:
“We have $7.2 billion dollars of converts, but $4 billion of them are essentially equity, they’re through the strike price, the call price, and they are trading with a delta of approximately 100%, they are looking like equity. We would like to go back and build more intelligent leverage for the benefit of our common stock shareholders.”
With the change in strategy, there have been speculations that the company might pause its Bitcoin acquisition in January 2025. So far, the company has been buying Bitcoin every week of December, making its acquisitions a norm.
MicroStrategy continues to outperform Bitcoin
Meanwhile, MicroStrategy’s Bitcoin strategy continues to prove successful as Bitcoin continues to perform above expectations. MSTR stock has even outperformed BTC this year, seeing a 476% gain year-to-date compared to Bitcoin’s 122% gains. However, Bitcoin recent dip to $95,000 also affected MicroStrategy MSTR value.
The plunge in BTC price was enough to trigger some concerns about whether MicroStrategy approach of using debt to buy Bitcoin might haunt it later in the future. However, experts believe any concern about MicroStrategy being overexposed is exaggerated as it only has $7 billion in debt, compared to $46 billion in Bitcoin. As CryptoQuant CEO observed, an asteroid would have to hit the earth for MicroStrategy to go bankrupt
Nevertheless, the tide seems to have turned for Bitcoin, with the asset gaining 2% in the last 24 hours and now above $98,000. Many expect the recent dip to be followed by a massive surge, noting that it could be the last chance to buy below $100,000.
Market is super excited about buying Bitcoin dip (Source: Santiment)
Santiment observed that this is the most enthusiastic people have been about buying the dip in the last eight months. Santiment analysts noted that the last time the market saw this level of enthusiasm about buying the dip was on August 4th after a major price crash, and the BTC market cap is up 81% since then.
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