MicroStrategy Quietly Pushes New Bitcoin Plan: Printing Shares To Buy More BTC

Key Takeaways

• MicroStrategy wants to issue billions of new shares to buy more Bitcoins.
• The firm aims to increase authorized Class A shares from 33 million to 10.33 billion.
• MicroStrategy recently added 5,262 BTC, pushing its total holdings to 444,262 Bitcoin.

MicroStrategy’s appetite for Bitcoin (BTC) is only growing as it runs through its ambitious 21/21 plan.

The company is planning to hold a special shareholder meeting to seek approval to issue billions of new shares, which would further fund its aggressive Bitcoin acquisition plan.

Printing Shares for Bitcoin

At the heart of the proposal is a plan to increase the authorized Class A shares from 33 million to 10.33 billion and the authorized preferred shares from 5 million to 1.005 billion.

This massive leap is designed to strengthen MicroStrategy’s ability to raise capital through equity offerings.

Additionally, the company plans to amend its 2023 Equity Incentive Plan to offer automatic equity awards to incoming board members, aligning incentives as it moves deeper into its Bitcoin-focused strategy.

The timing of the shareholder meeting aligns with its latest Bitcoin buy.

MicroStrategy revealed it had acquired an additional 5,262 Bitcoin for approximately $561 million at an average price of $106,662 per Bitcoin.

This purchase pushes the firm’s total Bitcoin holdings to 444,262 BTC, acquired at an average cost of $62,257 per Bitcoin, with a total expenditure of $27.7 billion.

Is MicroStrategy’s Bitcoin Obsession Sustainable?

MicroStrategy began its Bitcoin journey in 2020 when the asset was trading near $10,000.

Over four years, the company has exponentially increased its holdings, even as Bitcoin prices soared past $100,000.

While the current bullish market sentiment has been profitable for the firm—its Bitcoin stash is sitting on a $15 billion unrealized gain—the strategy is not without risks.

The company’s average buying price of $62,257 per Bitcoin makes it heavily dependent on the asset’s continued upward trajectory.

A bear market similar to the 2022-23 cycle, where Bitcoin prices fell over 70%, could pose significant financial risks.

In the previous cycle, Bitcoin’s price plummeted from $69,000 to $16,000, testing MicroStrategy’s resilience.

This time, with a much larger Bitcoin position and a higher average purchase price, the stakes are even higher.

This is especially considering the company’s rapid spending—Microstrategy has already spent over $14 billion of its $42 billion budget this month.

Critics argue that the firm’s strategy hinges on Bitcoin maintaining its upward momentum.

Any significant downturn could leave MicroStrategy in a precarious position, with its equity-based fundraising strategy and massive Bitcoin holdings amplifying the risks.

The shareholder vote will determine whether this bold bet on Bitcoin’s future gains the necessary support to continue—and whether MicroStrategy’s faith in the BTC will ultimately pay off.