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MicroStrategy (Nasdaq: MSTR), the world's largest corporate holder of Bitcoin, has revealed a strategic plan to raise $42 billion in capital over the next three years. The company intends to raise $21 billion through equity offerings and another $21 billion via fixed-income securities to bolster its Bitcoin holdings. This capital will be used to acquire additional Bitcoin, increasing its treasury reserve and enhancing its key performance metric, the Bitcoin Yield (BTC Yield). BTC Yield assesses the effectiveness of its Bitcoin acquisition strategy, which the company believes is accretive to shareholders.

Capital Raise and Bitcoin Strategy

As part of its new '21/21 Plan,' MicroStrategy aims to continue expanding its Bitcoin reserves. The company achieved an 11% increase in Bitcoin holdings during Q3 2024, bringing its total to approximately 252,220 bitcoins. As of September 30, 2024, the original cost basis and market value of the company’s Bitcoin were $9.904 billion and $16.007 billion, respectively, reflecting an average cost per bitcoin of approximately $39,266 and a market price per bitcoin of $63,463. The company achieved a year-to-date BTC Yield of 17.8% and is targeting an annual BTC Yield of 6% to 10% between 2025 and 2027.

To fund this strategy, MicroStrategy announced a substantial $21 billion At-the-Market (ATM) equity offering on October 30, 2024, which will be available over time. Additionally, the company issued $1.01 billion in convertible senior notes in September 2024, which facilitated the redemption of $500 million in higher-interest debt.

Q3 2024 Financial Highlights

For the third quarter of 2024, MicroStrategy reported a net loss of $340.2 million, or $1.72 per share, driven by significant impairment losses on its digital assets, amounting to $412.1 million. Total revenues decreased 10.3% year-over-year to $116.1 million, though subscription services saw growth. Despite the losses, the company's aggressive Bitcoin acquisition strategy continues to be its focus, with the long-term goal of maximizing value for shareholders through its Bitcoin reserves.

Outlook and Long-Term Bitcoin Focus

MicroStrategy's CEO, Phong Le, emphasized the company's goal to leverage the ongoing digital transformation and Bitcoin's role as a treasury reserve asset. The company aims to continue using "intelligent leverage" to acquire Bitcoin at scale, reinforcing its position as the first Bitcoin Treasury Company.