Micro strategy plans to issue billions of shares to purchase more Bitcoin

US software development company MicroStrategy has proposed increasing its holdings of Class A common stock and special stock to better execute its Bitcoin strategy. Shareholders will vote on this proposal next year.

According to the 14A proxy statement submitted by Micro Strategy to the US Securities and Exchange Commission (SEC), the proposal plans to increase the number of Class A common shares from 330 million to 10.33 billion, and the number of special shares from 5 million to 1.005 billion. The company stated that the proposed share issuance will support its "21/21 Plan".

The goal of the 21/21 plan is to raise $42 billion over the next three years, of which $21 billion will be raised through equity and the remaining $21 billion will be raised through fixed income securities. The plan aims to support further Bitcoin purchases through micro strategies as part of its financial reserve strategy.

The latest statement from Micro Strategy also details the company's other proposals, including a new equity incentive plan that will grant automatic equity rewards to new directors.

In the 8-K report submitted last Friday, Micro Strategy increased the number of board members from 6 to 9, with new members including Brian Brooks, Jane Dietze, and Gregg Winiarski. Brooks served as the CEO of Binance for three months in 2021, while Dietze has been a member of the Galaxy Digital board since 2022.

We hope that the proposals you are considering reflect a new chapter in our evolution as a Bitcoin treasury company, as well as our ambitious goals for the future

The specific date for the special shareholders' meeting involving voting on the proposal has not been announced yet, but it has been scheduled to be held in 2025.

Micro Strategy has been continuously accumulating Bitcoin since 2020 and has become the listed company with the largest holdings of Bitcoin in the world. In addition to the aforementioned statement, the company also announced yesterday an increase in holdings of approximately 5262 bitcoins. As of December 22, 2024, Micro Strategy and its subsidiaries hold approximately 444262 bitcoins with a total cost of approximately $27.7 billion and an average purchase price of approximately $62257.

Although news of micro strategy buying Bitcoin usually drives its stock price up, the company's stock price fell 8.78% to $332.23 at the close on Monday, a drop of about 38% from its historical high set in November. Nevertheless, the stock price of Micro Strategy has risen by as much as 450% in the past year.

data source