MicroStrategy has announced a new stock offering. They aim to raise funds for "general corporate purposes," which includes buying more Bitcoin. Recently, they purchased $1.1 billion worth of Bitcoin, bringing their total holdings to 471,107 BTC.
On January 27, MicroStrategy revealed plans to offer 2.5 million units of their perpetual strike preferred stock. This type of stock has a liquidation preference and pays fixed-rate dividends. Investors can also convert these shares into common stock if they choose.
The offering will have a liquidation preference of $100 per share. Dividends will be paid quarterly, starting on March 31. MicroStrategy stated that they will use the net proceeds from this offering to acquire more Bitcoin and for working capital.
In their announcement, MicroStrategy called itself the "world's first and largest Bitcoin Treasury Company." This indicates a shift in their focus from business intelligence software to cryptocurrency investments.
For the third fiscal quarter, MicroStrategy reported a 10.3% drop in revenue, totaling $116.1 million. Their gross profit margin also decreased from 79.4% to 70.4%. Despite these declines, the company achieved a 5.1% yield on Bitcoin, setting a new performance metric for their crypto holdings.
MicroStrategy has ramped up its Bitcoin purchases. They have a strategy to raise $42 billion for their digital asset portfolio, known as the “21/21 Plan.” This plan includes $21 billion in equity and $21 billion in fixed-income securities. One significant purchase happened just before Donald Trump’s inauguration when MicroStrategy acquired 11,000 BTC at an average price of about $101,191. Their largest buy occurred in November when they purchased 55,000 BTC for around $5.4 billion.
Interestingly, Bitcoin miners are following MicroStrategy's example. They are building up their own digital asset reserves. A report from Digital Mining Solutions and BitcoinMiningStock noted that in 2024, many miners chose to hold onto a larger portion of their mined Bitcoin or decided not to sell at all.
Other public companies are also adding Bitcoin to their balance sheets. Companies like Semler Scientific, KULR Technology, and Metaplanet have joined in on this trend.