MicroStrategy plans to raise $42 billion capital to buy more Bitcoin.
MicroStrategy, the world’s largest corporate Bitcoin holder, has unveiled plans to raise $42 billion in capital over the next three years to expand its Bitcoin holdings.
The announcement came during the company’s Q3 2024 financial results presentation. MicroStrategy’s newly announced “21/21 Plan” involves raising $21 billion in equity and an additional $21 billion through fixed-income securities.
The third quarter proved fruitful for MicroStrategy. The company had successfully raised $2.1 billion through equity and debt offerings.
The company increased its Bitcoin holdings by 11% during the quarter while achieving a year-to-date BTC yield of 17.8%.
Despite the focus on Bitcoin acquisition, MicroStrategy’s core software business showed mixed results.
Total revenues decreased by 10.3% year-over-year to $116.1 million, while subscription services revenues increased by 32.5% to reach $27.8 million.
The company’s gross profit stood at $81.7 million with a 70.4% margin, compared to the previous year’s 79.4% margin. Product support revenues experienced an 8.7% decrease, settling at $61.0 million.
As the world’s first Bitcoin Treasury Company, MicroStrategy continues to pioneer institutional Bitcoin adoption. The company’s approach involves strategic Bitcoin accumulation using proceeds from equity and debt financings, alongside operational cash flows.
Through this aggressive capital raising initiative, MicroStrategy has purchased 252,220 Bitcoin over the years.
Interestingly, the company is sitting on an unrealized gain of $8.3 billion. This is an 83.5% unrealized gain on their investment. Their last Bitcoin purchase was made on September 20, 2024. During this time, the company bought 7420 BTC for $458.2 million. The announcement by MicroStrategy comes amidst Bitcoin’s recent price surge above the $72,000 level.
CoinMarketCap data shows that Bitcoin is now hovering at $72,300, with a 7% surge over the last seven days.
In Related News, Reddit sold the majority of its cryptocurrency holding, mainly dominated by Bitcoin, before BTC started pumping up in October, as revealed in its latest Securities and Exchange Commission (SEC) filing.
The news comes as Bitcoin has experienced a significant price gain that cryptocurrency traders have coined the term ‘Uptober.’
In its SEC filing the company said: “During the three months ended September 30, 2024, we sold the majority of our cryptocurrency portfolio, which consisted primarily of Bitcoin and Ether.”
Reddit sold its Bitcoin at a price between $54,000 and $68,000 before it could cash in on a potential windfall as the cryptocurrency soared to $73,000.
Although Reddit did not disclose the amount of cryptocurrency that was disposed of, it maintained that the sale was immaterial.