MicroStrategy is about to hold a special shareholders' meeting to expand its stock issuance plan and acquire more bitcoins. This software development company, which currently holds the most bitcoins, proposes to increase its Class A common stock and preferred shares to better execute its bitcoin strategy.
According to the proxy statement submitted by MicroStrategy to the SEC on December 23, the company is seeking authorization to increase the issuance amount of both Class A common stock and preferred stock, so that it can issue more shares as needed in the future.
The first amendment seeks to increase the authorized issuance of Class A common stock from 330 million shares to 10.33 billion shares, while the purpose of the second amendment is to raise the authorized issuance of preferred shares from 5 million shares to 1.005 billion shares.
Behind these two proposals is MicroStrategy's "21/21 plan." This plan, announced in October, describes the company's intention to acquire an additional $42 billion worth of bitcoins over the next three years. The plan includes raising $21 billion through stock issuance and an additional $21 billion through the issuance of fixed-income securities.
In addition, the proxy statement details other proposals from the company, including a new equity incentive plan that will automatically grant equity awards to new directors.
According to the documents submitted by MicroStrategy: "Proposals 1 and 2 of this special meeting request an increase in the authorized shares of the company's capital stock to support the further implementation of our 21/21 plan and broader future capital market activities, as well as other corporate purposes."
MicroStrategy has been regularly purchasing bitcoins since 2020, but has intensified its purchases since announcing the aforementioned plan in October. In December alone, the company bought 42,162 bitcoins, with a market value exceeding $4 billion at current prices.
At the end of October, MicroStrategy announced that the company's bitcoin yield is 17.8%, and the company's plan is to achieve an annual yield of 6% to 10% between 2025 and 2027. Thereafter, the company plans to raise $13 billion through stock issuance and up to $3 billion through convertible bond issuance.
The company's documents state: "The execution pace of our 21/21 plan is significantly faster than originally expected."
As of December 22, MicroStrategy and its subsidiaries collectively hold approximately 444,262 bitcoins, valued at approximately $43.53 billion. The total amount spent on these bitcoins is $27.7 billion, which represents an average purchase price of $62,257 per bitcoin.
Although news of MicroStrategy buying bitcoins typically drives up the company's stock price, the stock fell sharply by 8.78% on Monday, rebounded by 7.8% to $358.18 per share on Tuesday, but still fell 11% over the past month. Nonetheless, the stock has skyrocketed over 400% in the past year, primarily due to its bitcoin strategy.
The specific date for the special shareholders' meeting to vote on this proposal has not yet been announced, but it is expected to be held in 2025, with the company's next earnings report scheduled for release on February 2, 2025.
"MicroStrategy will hold a shareholders' meeting seeking permission to raise capital to acquire more bitcoins" This article was first published by (BlockKey).
