MicroStrategy's Bitcoin Bet: $2.5M Stock Offering to Boost Crypto Holdings

MicroStrategy Proposes 2.5M Share Offering to Fund Bitcoin Purchases

Business intelligence firm MicroStrategy has proposed a stock offering to raise cash for “general corporate purposes,” including acquiring more Bitcoin (BTC), signaling its intent to continue accumulating the digital asset. According to a Jan. 27 announcement, MicroStrategy intends to offer 2.5 million units of its perpetual strike preferred stock, which is a type of stock that has a liquidation preference and pays dividends at a fixed rate. Holders also have the option of converting it into common stock. According to MicroStrategy, its offering will have a per-share liquidation preference of $100. Dividends are payable quarterly, beginning on March 31. “MicroStrategy intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin and for working capital,” the company said.

In the announcement, MicroStrategy described itself as the “world’s first and largest Bitcoin Treasury Company,” signaling that its business intelligence software is no longer its primary business. In its fiscal third quarter, the company’s revenues declined 10.3% year over year to $116.1 million. Its gross profit margin also fell to 70.4% from 79.4% for the third quarter of 2023. Nevertheless, MicroStrategy said it achieved a 5.1% Bitcoin yield, a new performance metric for its crypto holdings.

BTC purchases ramp up

MicroStrategy has intensified its Bitcoin purchases after announcing plans to raise $42 billion for its digital asset war chest. Its so-called “21/21 Plan” is comprised of $21 billion of equity and $21 billion of fixed-income securities. The company made one of its largest-ever purchases in the lead-up to US President Donald Trump’s inauguration, snatching up 11,000 BTC at an average price of roughly $101,191.

MicroStrategy’s biggest BTC buy occurred in November when it acquired 55,000 coins for roughly $5.4 billion. Elsewhere, Bitcoin miners appear to be taking apage out of the MicroStrategy playbook by building up their own digital asset stockpile. “In 2024, a notable shift emerged among Bitcoin miners, with many opt