MicroStrategy Goes on a Bitcoin Buying Spree...Raises $42 Billion

MicroStrategy (NAS:MSTR) is raising $42 billion to buy more Bitcoin (BTC/USDT). MicroStrategy has been buying Bitcoin for years, but this investment is unusual in its size. According to Business Insider, MicroStrategy, led by founder and Bitcoin evangelist Michael Saylor, plans to raise $42 billion to buy more Bitcoin.

The amount is nearly equal to the company's market value of about $45 billion. “Our goal is to maximize shareholder value by leveraging the digital transformation of capital,” said MicroStrategy CEO Fong Le. The company plans to raise the $42 billion in a 50/50 split of equity and debt offerings over the next three years. On March 30, it filed with the U.S. Securities and Exchange Commission (SEC) for a $21 billion initial public offering. This will allow the company to sell shares directly in the market and use the proceeds for capital.

MicroStrategy's stock price is currently at its highest level since it peaked in March 2000 during the dot-com bubble. The company's existing software business is struggling, and issuing additional shares seems to be an effective option. MicroStrategy posted revenue of $116 million in the third quarter, but lost about $433 million. This is a 10% year-over-year decline, marking the fourth consecutive quarter of year-over-year revenue declines.

Microstrategy has been actively buying bitcoin since 2020 and holds about 252,000 bitcoins, with an average purchase price of about $39,000 per bitcoin. Bitcoin surpassed $70,000 as of last month 31st (local time) and is nearing an all-time high of around $74,000.

At the end of the third quarter of this year, MicroStrategy's Bitcoin holdings were valued at $16 billion, or about one-third of the company's market value. The success of the company's strategy to bet its market value entirely on Bitcoin will likely depend on the price of Bitcoin.