MicroStrategy plans to raise capital and align leadership with its Bitcoin strategy.
The company’s stock is down despite its large Bitcoin holdings.
MicroStrategy, a business intelligence company, revealed its plan to hold a special meeting with its shareholders to approve some proposals that seek to strengthen the company’s Bitcoin-centered approach under its proposed “21/21 plan.” The company is enhancing its financial freedom and synchronizing the directors’ remuneration as it concentrates on acquiring more Bitcoin and related endeavors.
Proposals to Expand Capital-Raising Capacity
As of 31 December 2014, the authorized number of Class A shares was 330 million, but the firm is asking for the green light to issue up to 10.33 billion. That would greatly improve MicroStrategy’s prospects for financing potential future investments such as extra bitcoin purchases, adding to its strengths.
Also, it has been recommended that the company increase its authorized preferred shares from 5 million to 1.005 billion. The message for the firm is clear. By expanding its sources of funds, the company will be able to sustain its torrid pace of buying Bitcoin while considering other strategic, long-term goals.
MicroStrategy has prepared and suggested changes to the 2023 Equity Incentive Plan to continue this Bitcoin-centric strategy. Such changes include vesting equities to the new directors to remind the company of the vision set for Bitcoin investment and expansion.
MicroStrategy’s Bitcoin Holdings and Impact on Valuation
MicroStrategy now owns 439,000 Bitcoins, which are equivalent to about $42 billion at their current price. This means it is amongst the largest owners of Bitcoin in the world, behind only Satoshi Nakamoto, BlackRock’s Bitcoin ETF, and Binance. This shift in the company’s main focus to Bitcoin in 2020 has seen its valuation increase 80 times, with its current market capitalization potentially hitting $82 billion.
Executives at the firm, including the co-founder and executive chairman, Michael Saylor, have maintained high levels of support for the Bitcoin strategy, citing its ability to deliver higher growth rates in the future.
Stock Performance Amid Bitcoin Volatility
MicroStrategy’s stock (MSTR) has fallen for some time, even though it is featured in the NASDAQ 100 Index. On Monday, the stock fell 8.78% to $332, down 19% on the week and 17.65% on the month. From its high of $472 in November, the stock price has now pulled back by 30%.
Other factors include the recent fluctuation in the bitcoin market, which has also affected the firm’s stock. Bitcoin reached an ATH at $ 108k, yet there is pressure selling, and it has gone down to $90k, which marked a weekly loss of 11.52%.
Nevertheless, MicroStrategy sees its Bitcoin-focused strategy and future growth in the same terms and expects a more favorable legal framework in the United States.
