Michael Saylor, the co-founder and Chairman of MicroStrategy, has unveiled an ambitious plan to raise $21 billion to acquire more Bitcoin by issuing additional shares of MSTR at current market prices.
This decision will likely dilute the value of existing shares, which typically leads to a decline in the stock price. Surprisingly, MicroStrategy's stock has remained relatively stable after partly due to shareholder loyalty to the company's strong performance since 2020, as well as its large Bitcoin holdings.
MicroStrategy's journey into Bitcoin began in at a time when corporate investments in cryptocurrency were still gaining traction. Over the past four years, the company has been acquiring Bitcoin through the enterprise, amassing a total of 252,220 Bitcoins, which represents about 1% of the total Bitcoin supply, at about $17.6 billion. Their last purchase was in September 2024, acquiring 7,420 Bitcoins at an average price of $61,750 each, for a total of approximately $458.2.
Despite concerns about share dilution, shareholders remain optimistic. MicrStrategyss significant Bitcoin holdings create a unique relationship between the performance of its stock and the price of Bitcoin, positioning the company as a potential quasi-Bitcoin exchange-traded fund (ETF).
The total investment in Bitcoin stands at about $9.9 billion, with the current value of these holdings being 95% higher than the initial investment, contributing to a notable rise in the company’s stock price.
Since MicroStrategy began its Bitcoin strategy, its stock price has skyrocketed from around $13 in 2020 to approximately $244.50 today, reflecting a remarkable 250% increase just this year, far surpassing Bitcoin's 60% growth.
Looking ahead, Saylor aims to purchase $42 billion worth of Bitcoin over the next three years, supported by the recent equity raise and debt notes. If successful, this could triple the company's Bitcoin holdings, depending on the average purchase price.