MicroStrategy's Bitcoin Bet: $250M Stock Offering for Crypto Acquisition

Coin WorldMonday, Jan 27, 2025 2:04 pm ET

1min read

Business intelligence firm MicroStrategy has been making waves in the cryptocurrency world with its aggressive Bitcoin (BTC) acquisition strategy. In a recent announcement, the company proposed a stock offering to raise cash for "general corporate purposes," including the purchase of more Bitcoin, signaling its intent to continue accumulating the digital asset.

The offering, which was announced on Jan. 27, involves the sale of 2.5 million units of the company's perpetual strike preferred stock. This type of stock has a liquidation preference and pays dividends at a fixed rate, with holders having the option to convert it into common stock. The per-share liquidation preference is set at $100, with dividends payable quarterly beginning on March 31.

MicroStrategy stated that the net proceeds from the offering will be used for general corporate purposes, including the acquisition of Bitcoin and for working capital. The company also described itself as the "world's first and largest Bitcoin Treasury Company," indicating that its business intelligence software is no longer its primary business focus.

Despite a 10.3% year-over-year decline in revenues to $116.1 million and a drop in gross profit margin to 70.4% in its fiscal third quarter, MicroStrategy reported a 5.1% Bitcoin yield, a new performance metric for its crypto holdings.

MicroStrategy has been ramping up its Bitcoin purchases, with one of its largest-ever acquisitions occurring in the lead-up to the US President Donald Trump's inauguration. The company snapped up 11,000 BTC at an average price of roughly $101,191. Its biggest BTC buy occurred in November when it acquired 55,000 coins for roughly $5.4 billion.

In addition to MicroStrategy's aggressive Bitcoin acquisition strategy, Bitcoin miners have also been building up their own digital asset stockpiles. According to a Jan. 7 report by Digital Mining Solutions and BitcoinMiningStock, a notable shift emerged among Bitcoin miners in 2024, with many opting to retain a larger portion of their mined Bitcoin or refraining from selling altogether.

Other public companies have also added Bitcoin to their balance sheets, following MicroStrategy's lead in the cryptocurrency space.

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