MicroStrategy, the world’s largest corporate holder of Bitcoin, has revealed plans to raise $42 billion in capital over the next three years to expand its Bitcoin holdings.

The announcement was made during the company’s Q3 2024 financial results presentation. MicroStrategy’s newly announced “21/21 Plan” involves raising $21 billion in capital and an additional $21 billion through fixed income securities.

MicroStrategy will use the capital to buy more Bitcoin

CEO Phong Le emphasized that this strategic initiative aims to increase shareholder value through digital capital transformation.

“Our focus remains on increasing value for our shareholders by leveraging the digital transformation of capital,” Le said during the announcement. He further explained that the raised capital would be used to acquire more Bitcoin as a Treasury reserve asset.

The third quarter proved to be fruitful for MicroStrategy. The company successfully raised $2.1 billion through equity and debt offerings.

CFO Andrew Kang reported that the company increased its Bitcoin holdings by 11% during the quarter, achieving a yield of$BTC accumulated in the year of 17.8%.

The company was also able to reduce its total annualized interest expense by $24 million. On August 7, 2024, MicroStrategy completed a 10-for-1 stock split of its Class A and Class B common stock.

MicroStrategy’s core business shows mixed results

Despite the focus on Bitcoin acquisition, MicroStrategy's core software business has seen mixed results.

Total revenue decreased 10.3% year-over-year to $116.1 million, while subscription services revenue increased 32.5% to $27.8 million.

The company's gross profit was $81.7 million with a margin of 70.4%, compared to the prior year's margin of 79.4%. Product support revenues fell 8.7% to $61.0 million.

As the world’s first Bitcoin Treasury Company, MicroStrategy continues to pioneer institutional adoption of Bitcoin. The company’s approach involves strategic accumulation of Bitcoin using proceeds from equity and debt financings, along with operating cash flows.

Through this aggressive capital raising initiative, MicroStrategy has purchased 252,220 Bitcoins over the years. According to data from Saylortracker, the value of its current Bitcoin holdings is $18.27 billion.

Interestingly, the company is sitting on an unrealized gain of $8.3 billion. This is an unrealized gain of 83.5% on its investment. Its last Bitcoin purchase was made on September 20, 2024. During that time, the company purchased 7420 BTC for $458.2 million. MicroStrategy’s announcement comes amid the recent surge in Bitcoin’s price above the $72,000 level.

Data from CoinMarketCap shows that Bitcoin is now at $72,300, up 7% over the past seven days.

#BTC☀️ #ETHETFsApproved #TopCoinsSeptember