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Michael Saylor’s Bold Strategy: More Bitcoin, More Capital Flexibility
MicroStrategy Redeems Debt Early to Fuel Bitcoin Growth
MicroStrategy Now Owns 2% of All Bitcoin After Latest Purchase
Bitcoin Giant MicroStrategy Ramps Up Capital Moves for Future Buys
MicroStrategy Inc., the Tysons Corner-based enterprise software company that has evolved into a Bitcoin-focused entity, has purchased $1.1 billion worth of Bitcoin. This marks the company’s 12th consecutive week of acquisitions, bringing its total holdings to over 2% of all Bitcoin that will ever exist.
Between January 21 and January 26, MicroStrategy acquired 10,107 Bitcoin tokens at an average price of $105,596, according to an SEC filing. The company now holds Bitcoin worth approximately $47 billion.
To fund these aggressive Bitcoin purchases, MicroStrategy has relied on at-the-market stock sales and convertible debt offerings, part of a larger plan to raise $42 billion in capital by 2027. The company announced on Friday that it would redeem over $1 billion in 0% Convertible Senior Notes due in 2027 on February 24. These notes, with a conversion price of $142.38 per Class A share, are being redeemed early to enhance flexibility in raising additional capital.
MicroStrategy’s shares, which closed at $353.67 on Friday, are up 615% over the past year but dropped 5.5% in pre-market trading on Monday.
Redeeming these notes allows the company to consider other capital-raising options, including issuing perpetual preferred stock or additional equity. Earlier this month, shareholders approved a significant increase in the number of authorized Class A shares from 330 million to 10.3 billion and preferred shares from 5 million to 1 billion. This move provides the company with more options to fund Bitcoin purchases and cover expenses without selling its Bitcoin holdings.
Benchmark analyst Mark Palmer praised the strategy, noting that lengthening debt maturities will help investors focus on MicroStrategy’s long-term objectives rather than near-term challenges.
MicroStrategy may also issue up to $2 billion in perpetual preferred stock, as outlined in a January 3 announcement, which would take precedence over Class A shares.
“We have and expect to continue to have ample liquidity through capital markets activities and operational cash flows,” said Michael Saylor, co-founder and chairman, during the shareholder meeting. “We haven’t sold and don’t intend to sell our Bitcoin to satisfy interest obligations.”
MicroStrategy’s continued commitment to Bitcoin signals its confidence in the cryptocurrency’s long-term value, even as the company diversifies its financial strategies to maintain liquidity and drive future growth.
