MicroStrategy Seeks Shareholder Approval to Fund More Bitcoin Purchases with Expanded Equity Plan

MicroStrategy, the business intelligence software company known for its aggressive Bitcoin strategy, has called for a special shareholder meeting to seek approval for a significant expansion of its equity-issuance plan. The company aims to use the new equity issuance to fund additional Bitcoin purchases under its ambitious 21/21 Plan.

Aiming for $42 Billion in Bitcoin Purchases

In a December 23 filing with the U.S. Securities and Exchange Commission (SEC), MicroStrategy outlined plans to increase the number of authorized shares for both its Class A common stock and preferred stock. This move is designed to give the company more flexibility to issue additional shares in the future, which will help fund its Bitcoin acquisitions.

The filing details two key amendments:

• Class A Common Stock: The company proposes to increase the number of authorized shares from 330 million to 10.33 billion.

• Preferred Stock: The company seeks to increase the number of authorized preferred shares from 5 million to over 1 billion.

The primary driver behind these changes is MicroStrategy’s 21/21 Plan, which was first disclosed in October 2024. The plan aims to acquire an additional $42 billion worth of Bitcoin over the next three years. To achieve this, MicroStrategy intends to raise $21 billion through equity sales and another $21 billion via fixed-income securities.

As outlined in the filing, the increased authorized shares would support the implementation of the 21/21 Plan and enable the company to continue its capital markets activities, along with other corporate purposes.

Accelerating Bitcoin Purchases

MicroStrategy has been acquiring Bitcoin consistently since 2020 but has accelerated its purchases since announcing the 21/21 Plan. In December alone, the company acquired 42,162 Bitcoin, worth over $4 billion at current market prices. As of December 22, MicroStrategy and its subsidiaries collectively hold approximately 444,262 BTC, valued at around $43.53 billion. These coins were acquired for a total of $27.7 billion, giving the company an average purchase price of $62,257 per Bitcoin.

The company’s Bitcoin strategy has significantly boosted its stock performance. As of December 2024, MicroStrategy's shares are up more than 422% year-to-date, largely driven by its ongoing Bitcoin acquisitions.

Rapid Execution of the 21/21 Plan

MicroStrategy has reported that it is moving much faster than anticipated with the implementation of its 21/21 Plan. Since its announcement, the company has raised $13 billion through stock issuances and another $3 billion through convertible bond offerings, far outpacing initial expectations.

The company’s success in acquiring Bitcoin has also translated into impressive returns on its Bitcoin holdings. In late October, MicroStrategy reported a Bitcoin yield of 17.8%, with expectations to achieve an annual yield of 6% to 10% between 2025 and 2027.

Looking Ahead

While the special shareholder meeting date has not yet been set, MicroStrategy’s next earnings report is scheduled for February 2, 2025. If shareholders approve the expanded equity plan, MicroStrategy will likely continue its rapid accumulation of Bitcoin, further cementing its position as one of the largest corporate holders of the cryptocurrency.

MicroStrategy’s bold strategy, driven by its 21/21 Plan, has captured the market’s attention and propelled the company’s stock to new heights in 2024. As Bitcoin continues to perform well, it seems the company is doubling down on its bet, positioning itself for even greater expansion in the coming years.