MicroStrategy (Nasdaq: MSTR) announced it is preparing to significantly increase its Bitcoin holdings by raising $2 billion through a new at-the-market equity offering. The announcement came after the market closed on Thursday, following a report of robust Q2 2024 earnings, which showed a substantial increase in the company’s assets.
Currently, MicroStrategy holds 226,500 BTC, which the company acquired at an average price of $36,821 per BTC, costing a total of $8.3 billion. These holdings are now valued at approximately $14.4 billion, reflecting a whopping appreciation in value.
MicroStrategy’s Q2 financials were robust, with the company highlighting a “BTC Yield” of 12.2% year-to-date. This new key performance indicator (KPI) is part of a broader strategy targeting a 4-8% BTC Yield annually over the next three years. The company’s President and CEO, Phong Le, emphasized their ongoing commitment to BTC, noting “an improved understanding of bitcoin and the increasing support for the ecosystem from bipartisan politicians and institutions,” especially during the recent Bitcoin 2024 Conference in Nashville.
Andrew Kang, the CFO of MicroStrategy, detailed the financial maneuvers that facilitated the increase in BTC holdings, including the issuance of $800 million in 2.25% convertible senior notes due in 2032 and the early redemption of $650 million worth of convertible notes due in 2025. These strategic financial decisions have allowed the company to increase its holdings by 12,222 BTCs since the start of the second quarter.
The company also announced a significant 10-for-1 stock split of its class A and class B common stock, effective in early August, which is expected to increase the liquidity of its shares.
Reactions To The Massive Bitcoin Buy Announcement
The potential upcoming $2 Bitcoin buy was hidden inside the official announcement with one sentence: “We continue to closely manage our equity capital, and are filing a registration statement for a new $2 billion at-the-market equity offering program.”
Reactions within the community have been predominantly positive, reflecting a strong endorsement of MicroStrategy’s aggressive Bitcoin acquisition strategy. Will Clemente III, a prominent crypto analyst, expressed astonishment at the scale of the planned purchase. He remarked: “Holy shit Saylor’s trying to buy another $2 billion of BTC.”
Matt (@matt_utxo), a known figure in the crypto X community, noted, “MSTR Estimated ~6.7% dilution to acquire ~31,000 Bitcoin. Saylor & Co. are continuing the strategy of trading corporate shares for the hardest asset on Earth.”
Smeet Bhatt, founder of Theya Bitcoin, hailed the strategy as a new paradigm of financial engineering, comparing Michael Saylor to legendary investor Warren Buffet. He stated, “Accretive dilution is a whole new paradigm of financial engineering that MSTR has unleashed by shorting a perpetually debasing currency to stack more hard money. Unfathomably based. Michael Saylor is the Warren Buffet of 21st century.”
At press time, the Bitcoin price didn’t react to the news. BTC is slightly up 0.1% in the last 24 hours, trading at $64,732.
Featured image from YouTube, chart from TradingView.com
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