Countdown To 500,000: MicroStrategy’s Aggressive Bitcoin Strategy Continues With $1 Billion Purchase

MicroStrategy, the enterprise software company based in Tysons Corner, Virginia, has made headlines once again on Monday by purchasing Bitcoin (BTC) for the twelfth consecutive week. 

This latest acquisition saw the company spend approximately $1.1 billion on the market’s leading cryptocurrency from January 21 to January 26, as disclosed in a recent filing with the US Securities and Exchange Commission (SEC). 

With these purchases, MicroStrategy now holds around 471,107 BTC, valued at roughly $30.4 billion, representing over 2% of the total Bitcoin supply that will ever exist.

To further finance its Bitcoin acquisition strategy, MicroStrategy has announced plans to sell $250 million in perpetual preferred stock, offering an attractive 8% fixed coupon. 

This stock will have a conversion price of $1,000, although details remain limited as the information is not yet public. The venture aims to bolster the company’s already substantial Bitcoin holdings, which are nearing the 500,000 BTC milestone.

MicroStrategy has employed various fundraising strategies, including at-the-market stock sales and convertible debt offerings, with a goal of raising $42 billion in capital through 2027.

The company’s stock has also shown remarkable growth, surging approximately 600% over the past year, although it experienced a slight decline of about 1.4% to $348.65 in early trading on Monday. Meanwhile, Bitcoin’s price fell around 2.5% to $101,500.

MicroStrategy also announced recently that it would redeem over $1 billion of its 0% Convertible Senior Notes due in 2027 earlier than anticipated, with a planned redemption date of February 24. 

This move is intended to streamline the company’s financial obligations and provide greater flexibility for future capital raises. Benchmark analyst Mark Palmer noted that this strategy would allow investors to focus on the company’s operations rather than potential financial impediments.

Redeeming these notes could also pave the way for MicroStrategy to issue new convertible debt with longer maturities, enhancing its capital-raising options. 

The company plans to offer approximately 2.5 million shares of Series A perpetual strike preferred stock, which will be senior to its Class A common stock and provide regular quarterly dividends starting March 31.

Moreover, MicroStrategy has the green light from shareholders to significantly increase its authorized shares—from 330 million to 10.3 billion for Class A common stock—enabling it to pursue further equity offerings. 

This decision aligns with the company’s ongoing efforts to maintain liquidity and support its ambitious Bitcoin acquisition strategy without needing to liquidate its holdings.

Saylor emphasized the company’s liquidity position, asserting, “We’ve had and expect to continue to have ample access to liquidity through our capital markets activities and cash flows from operations.” 

The firm’s co-founder further reassured investors that the company has no intention of selling its Bitcoin to meet interest obligations, reinforcing MicroStrategy’s commitment to its cryptocurrency strategy.

Featured image from DALL-E, chart from TradingView.com