MicroStrategy’s Plan to Issue 10 Billion MSTR Shares for Bitcoin Acquisition – Will it Boost BTC?
MicroStrategy, a pioneer in corporate Bitcoin treasury management, is considering a significant increase in its MSTR share count to 10 billion to expedite its BTC acquisition efforts.
In a recent submission to the US Securities and Exchange Commission (SEC), the company informed its shareholders about an upcoming special meeting to request approval for the proposed increase in shares.
If the recommendations receive the green light, the class A common stock will witness a jump from 330 million to 10.3 billion shares, while the preferred stock will see an increase from 5 million to 1 billion shares.
This move will escalate the total share count to over 11 billion, enabling the company to execute its BTC acquisition strategy known as the ’21/21 Plan’ more effectively.
MicroStrategy’s Expanded BTC Purchase Strategy
The ’21/21 Plan was initially unveiled in October 2024 with the aim of raising $42 billion by issuing equity ($21B) and utilizing debt instruments, such as convertible notes ($21B), within the next three years.
In a statement regarding the proposed rise in share count, the board emphasized their intention to diversify the securities offered in the market to facilitate business operations as outlined in the 21/21 plan and other strategic initiatives without relying solely on cash or Class A Stock.
Market analysts, including Joe Burnett from Unchained, speculate that MicroStrategy’s plan to issue 10 billion additional shares could potentially drive up the price of BTC considerably. Burnett suggested that the potential value of $3.3 trillion generated by this move could fuel a significant increase in Bitcoin prices.
Despite the optimistic outlook, some individuals raised concerns about the potential dilution of the current value of MSTR due to this expansion.
Since the announcement of the 21/21 Plan, MicroStrategy has acquired a substantial amount of Bitcoins, accumulating a total of 192,042 BTC, with the latest purchase of 5,262 BTC disclosed on December 23rd. The company now holds a staggering 444,262 BTC, valued at around $42 billion at current prices.
Following MicroStrategy’s latest Bitcoin purchase, MSTR shares surged by 11%. However, the stock witnessed a decline of close to 40% amidst the recent correction in BTC prices from $108,000 to a low of $92,000. Nevertheless, its year-to-date gains stood at 263%, outpacing BTC’s growth of 112%.
While MicroStrategy’s stock managed to defend the 50% Fibonacci level along with the 50-day Exponential Moving Average (EMA) currently at $323, any further correction in the value of BTC could potentially impact the stock negatively.