Financial Insights That Matter
- The company will increase its stock to 10.3 billion from 330 million.
- The share expansion offers several years of runway to continue buying Bitcoin.
- Only 9% of shareholders voted against the new proposals.
MicroStrategy shareholders on Tuesday gave the board the green light to issue billions of shares to finance the purchase of Bitcoin.
The move, which was supported by 56% of the votes cast with only 9% against, will accelerate Michael Saylor’s ambitious 21/21 plan for MicroStrategy.
On Monday, MicroStrategy said it had acquired $1.1 billion worth of Bitcoin — bringing its holdings to 461,000 Bitcoin or $50 billion.
Now the company is preparing to expand its stock float to 10.3 billion shares from 300 million.
Turbocharged stock
MicroStrategy’s commitment to acquire Bitcoin has turbocharged its share price as the top cryptocurrency hit all-time highs over the last year.
MicroStrategy’s shares, which have soared a whopping 704% in the last 12 months, are outpacing other stocks on the S&P 500. The company was recently added to the Nasdaq 100.
Still, MicroStrategy shares have skidded 20% since hitting a peak in November.
Sceptics say MicroStrategy’s strategy is bound to dilute existing shareholders and inject more volatility into its valuation by making it even more dependent on Bitcoin.
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“People will realise that new shareholders will be taken to the cleaners,” Charlie Morris, founder of investment research firm ByteTree, told DL News.
In October, Saylor, the company’s executive chairman, introduced a plan to raise $42 billion — divided into $21 billion in equity and $21 billion in bonds — to purchase more Bitcoin.
The business intelligence software provider rebranded itself a Bitcoin treasury company.
Its performance has inspired other companies to follow its lead.
There are now 77 publicly listed companies that hold the cryptocurrency on their balance sheet, according to data from Bitcoin Treasuries. Just 30 companies were doing that in 2021.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
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