Software company MicroStrategy is seeking approval for a proposal to expand its stock issuance plan by holding a special shareholder meeting, in order to more flexibly issue additional shares and provide funding support for future Bitcoin purchases.
Expand stock authorization plan
According to a proxy filing submitted to the U.S. Securities and Exchange Commission (SEC) on December 23, MicroStrategy plans to fund its 21/21 plan by increasing the authorized shares of Class A common stock and preferred stock. This plan was announced in October, aiming to repurchase $42 billion worth of Bitcoin over the next three years, which includes raising $21 billion through stock sales and $21 billion through fixed-income securities.
The two amendments proposed by MicroStrategy are:
Increase in authorized Class A common stock: from the original 330 million shares to 10.33 billion shares.
Increase in authorized preferred stock: from 5 million shares to over 1 billion shares.
The purpose of this proposal is to provide the company with more flexibility to support its future capital market activities, particularly to accelerate the execution of its Bitcoin purchase plan.
21/21 Plan: Further increase in Bitcoin
Since 2020, MicroStrategy has been aggressively acquiring Bitcoin and announced an ambitious 21/21 plan to invest $42 billion in acquiring more Bitcoin over the next three years. In December alone, MicroStrategy purchased 42,162 Bitcoins, worth over $4 billion at current prices.
The company stated, "We are executing the 21/21 plan at a pace significantly faster than initially expected."
Significant gains and stock price increases
As of December 22, MicroStrategy and its subsidiaries collectively own approximately 444,262 Bitcoins, valued at about $43.5 billion. Since the inception of the plan, MicroStrategy has raised $13 billion through stock issuance and $3 billion through convertible bonds. The company also plans to achieve an annual return of 6% to 10% between 2025 and 2027.
Due to the success of its Bitcoin strategy, MicroStrategy's stock price has risen over 422% year-to-date.
Looking ahead
The proposal at this shareholder meeting marks the company's continued commitment to increasing Bitcoin investments and further solidifies its leadership position in the cryptocurrency space. The company is expected to release its next financial report on February 2, 2025, detailing its Bitcoin investment results and future plans.
This strong confidence in Bitcoin and ongoing capital investment may spark more institutional investors' interest in Bitcoin and drive further development in the cryptocurrency market.
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