MicroStrategy (MSTR) Announces New $42B "21/21 Plan" to Acquire More Bitcoin

Bitcoin (BTC) Treasury Company MicroStrategy has announced a new strategic goal to raise $42 billion of capital over the next three years to purchase more Bitcoin as a treasury reserve asset.

MicroStrategy Announces Plan to Raise $42 Billion for Bitcoin Treasury Reserve over 3 Years

Bitcoin (BTC) Treasury Company MicroStrategy has announced a new strategic goal to raise $42 billion of capital over the next three years to purchase more Bitcoin as a treasury reserve asset.

In the company’s third-quarter report (Q3 2024), President and Chief Executive Officer of MicroStrategy Phong Le detailed this plan, stating that they aim to raise $21 billion from equity and $21 billion from fixed-income security. According to the report, this is termed as the “21/21 Plan.”

This decision underscores the company’s focus on increasing the value generated for shareholders through the leveraging of digital transformation of capital. Taking an analytical look at the report, CNF uncovered that MicroStrategy recorded a transformational quarter as it raised $2.1 billion in equity and debt. Additionally, its Bitcoin holding was increased by 11% through an outlined treasury strategy.

Explaining this further, the Chief Financial Officer at MicroStrategy, Andrew Kang, disclosed that the company reduced its total annualized debt expense by $24 million and recorded a 17.8% yield in its Bitcoin holding from year-to-date. Meanwhile, the latest plan to revise its long-term target to achieve an annual Bitcoin yield of 6% to 10% between 2025 and 2027 was highlighted.

BTC Yield is a key performance indicator (“KPI”) that the Company uses to help assess the performance of its strategy of acquiring bitcoin in a manner the Company believes is accretive to shareholders. See “Important Information about BTC Yield KPI” in this press release for the definition of BTC Yield and how it is calculated.

More Disclosure on MicroStrategy’s Bitcoin Activities

For a quick rundown on its digital asset portfolio, MicroStrategy indicated in the quarterly report that its digital assets holding, as of September 30, 2024, comprised 252,220 Bitcoins ($6.851 billion). This is a substantial increase from the 214,278 BTC held in March and the 226,331 held in June as we earlier reported.

Interestingly, the market value of this amount held was $16.007 billion and the original cost basis was $9.904 billion. To put this into perspective, the average cost per Bitcoin in this context was $39,266 while the market price per unit was $63,463.

In the report, MicroStrategy also highlighted that it sold 8,048,449 shares of its class A common stock for aggregate net proceeds of around $1.1 billion. As of the end of the third quarter, $891.3 million of its class A common stock was available for issuance and sale pursuant.

On top of this, a statement was issued on its Redemption of 2028 Senior Secured Note.

On September 26, 2024, the Company used proceeds from the 2028 Convertible Notes to redeem all $500 million aggregate principal amount of the Company’s 6.125% Senior Secured Notes due 2028 (the “2028 Secured Notes”) at a redemption price equal to 103.063% of the principal amount of the 2028 Secured Notes, plus accrued and unpaid interest to but excluding September 26, 2024.

Amid the backdrop of this, Bitcoin’s current price action has been bullish as several analysts predict a possible surge to $100k. A few days ago, the asset broke multiple resistance levels to trail its all-time-high price of $73,750 by just about $175. Currently, Bitcoin trades at $72,178 after declining by 0.35% in the last 24 hours.