The Impact of MicroStrategy’s Plan to Issue 10 Billion MSTR Shares on Bitcoin Prices
MicroStrategy, a trailblazer in incorporating Bitcoin into its corporate treasury, intends to ramp up its BTC acquisition program by expanding its MSTR share count to 10 billion.
In a submission to the SEC (Securities and Exchange Commission), the company notified shareholders about an upcoming special meeting to secure approval for the proposed increase in shares.
If the shareholders approve the plan, the total number of class A common stock shares will rise from 330 million to 10.3 billion, while the preferred stock will see an increase from 5 million to 1 billion shares.
This action aims to bolster the company’s total share count to over 11 billion, providing the necessary resources to execute its BTC acquisition strategy known as the ’21/21 Plan.’
Possible BTC Purchase Expansion by MicroStrategy
The ’21/21 Plan’ was initially unveiled in October 2024, with a goal of raising $42 billion through a mix of equity issuance ($21 billion) and debt instruments ($21 billion via convertible notes) over the next three years.
Commenting on the proposal to increase the share count, the board stated, “We are seeking stockholder approval to diversify the types of securities we offer, facilitate the implementation of our business strategy (including the 21/21 plan), and engage in strategic activities without relying on cash or Class A Stock.”
Responding to this development, Joe Burnett, Unchained’s director of market research, suggested that the potential issuance of 10 billion more shares by MSTR could drive up the price of BTC significantly.
Conversely, some individuals expressed concerns that this move might dilute the existing value of MSTR.
Following the announcement of the 21/21 Plan, MicroStrategy has obtained 192,042 Bitcoins, including a recent acquisition bid of 5,262 BTC. The company now possesses 444,262 BTC, amounting to nearly $42 billion based on current market prices.
After MicroStrategy’s latest BTC purchase, MSTR stock surged by 11%; however, the stock price has since dipped by approximately 40% amid a BTC correction from $108,000 to a low of $92,000. Nevertheless, it still registered a 263% increase year-to-date, outpacing BTC’s growth of 112%.
While MSTR defended the $323 level supported by the 50% Fibonacci level and the 50-day Exponential Moving Average (EMA) at the time of writing, further corrections in the BTC market could potentially impact the stock’s valuation.