MicroStrategy Plans $2B Fundraising for Bitcoin Acquisition

The biggest Bitcoin holder in the open, MicroStrategy, is stepping up its cryptocurrency investing approach. In a regulatory filing with the U.S. Securities and Exchange Commission, the business announced on August 1 that it intended to sell its class A shares in order to raise $2 billion. The Virginia-based corporation says it would put the money toward “general corporate purposes, including the acquisition of Bitcoin.” The precise time frame for these sales is still unknown.

According to the filing, “We intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin, unless otherwise indicated in the applicable prospectus supplement.” But MicroStrategy did not say how much of the money would go toward buying Bitcoin.

Bitcoin Purchases During Financial Results

This filing coincided with the release of MicroStrategy’s Q2 financial results. The company revealed it had acquired 12,222 BTC during the quarter, investing over $805 million at an average price of $65,880 per BTC. As of July 31, MicroStrategy’s total Bitcoin holdings reached 226,500 BTC, purchased at a cumulative cost of $8.3 billion. Additionally, the company introduced a new key performance indicator (KPI), “BTC Yield,” targeting annual returns of 4-8% over the next three years.

Despite these bold plans, MicroStrategy’s software business underperformed in Q2, with revenue hitting $111.4 million, falling short of analysts’ expectations of $119.3 million, according to Bloomberg. The company reported a net loss of approximately $102 million, while net income stood at $22.2 million. Following these financial results, MicroStrategy shares (MSTR) dropped over 6.3% to $1,511, as reported by Google Finance.

MicroStrategy’s consistent use of share sales to fund Bitcoin acquisitions underscores its commitment to a Bitcoin-centric strategy. In late 2023, the company sold $750 million worth of shares to purchase more Bitcoin. Subsequent reports confirmed multi-million dollar acquisitions of the cryptocurrency, reinforcing MicroStrategy’s steadfast dedication to its ambitious crypto investment approach.

Overall, MicroStrategy’s ongoing efforts to raise capital for Bitcoin purchases signal a strong belief in the future potential of the cryptocurrency. As the company continues to integrate Bitcoin into its financial strategy, its actions will likely be closely watched by both investors and the broader financial market.