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MicroStrategy has announced its plans to raise capital to purchase more Bitcoin over the next three years and boost its Bitcoin strategy. Interestingly, the company also revealed its new status as a Bitcoin Treasury Company.
MicroStrategy To Raise $42 Billion To Buy More Bitcoin
The software company announced in a press release its strategic goal of raising $42 billion of capital over the next three years to buy more Bitcoin. These funds will comprise $21 billion of equity and $21 billion of fixed-income securities.
MicroStrategy referred to itself as a ‘Bitcoin Treasury Company’ while revealing that some of this capital will be used to buy more BTC as a treasury reserve asset, allowing it to achieve a higher Bitcoin yield.
This plan is undoubtedly a huge boost for the Bitcoin price, considering the amount of buying pressure the flagship crypto could enjoy from the software company’s BTC purchases. It is worth mentioning that the company already holds 252,220 BTC ($6.851 billion), which it purchased at an average cost of $39,266 per bitcoin.
The company’s BTC holdings amount to 1.2% of Bitcoin’s total supply, making it the fifth-largest holder behind Satoshi Nakamoto, Binance, Blackrock, and Grayscale. MicroStrategy has evidently benefitted from its Bitcoin strategy, as the MSTR stock has been one of the best-performing assets, outperforming all major stocks and even the flagship crypto since it started buying BTC in August 2020.
How The Company Fared In Q3
The press release also provided insights into MicroStrategy’s performance in the third quarter of this year. The company’s total revenues were $116.1 million, below the estimated $122.5 million. The total revenue recorded also represents a 10% decrease year-over-year.
The software company’s loss from operations was $432.6 million, much higher than the $25.2 million it suffered in the third quarter of 2023. The Q3 net loss was $340.2 million or $1.72 per share on a diluted basis, which is higher than the $143.4 million net loss or $1.01 per share on a diluted basis it suffered in the third quarter of 2023.
Meanwhile, MicroStrategy is revising its long-term target to achieve an annual BTC yield of 6% to 10% between 2025 and 2027. The BTC is a key performance indicator that the company uses to assess its Bitcoin strategy in a manner that it believes provides more profits for its shareholders over time. The company’s BTC yield is 17.8% year-to-date (YTD).
The MSTR stock is down over 4% after trading hours to $247. However, it is worth mentioning that the stock recently reached new highs and achieved its best close since March 2020.
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Boluwatife Adeyemi
Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across DeFi, NFTs, smart contracts, and blockchain interoperability, among others. Boluwatife has a knack for simplifying the most technical concepts and making it easy for crypto newbies to understand. Away from writing, He is an avid basketball lover and a part-time degen.
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