MicroStrategy, known for being the largest public Bitcoin holder in the world, recently revealed its intention to raise up to $2 billion through the sale of its class A shares. This announcement was made in a regulatory filing with the U.S. Securities and Exchange Commission. While the company did not specify a timeline for the share sale, it mentioned that the funds raised would be used for general corporate purposes, including acquiring more Bitcoin. However, there was no clear indication of the exact amount that will be allocated to Bitcoin purchases.
The decision to raise funds through stock sales comes at a crucial time for MicroStrategy, as the company recently reported its Q2 financial results. Unfortunately, the financial report showed a second consecutive quarterly loss due to an impairment charge on its Bitcoin holdings valued at around $14.5 billion. As a result, MicroStrategy’s share price (MSTR) dropped by more than 6.3% to $1,511 following the release of the report. The company reported a net loss of $102.6 million in the quarter, compared to a net income of $22.2 million in the same period last year.
Bitcoin Acquisition Strategy
Despite facing financial challenges, MicroStrategy remains committed to expanding its Bitcoin holdings. In Q2 alone, the company acquired 12,222 BTC at an average price of $65,880 per BTC, spending over $805 million. This acquisition brought MicroStrategy’s total Bitcoin holdings to 226,500 BTC, acquired at a cumulative cost of $8.3 billion as of July 31. The company has consistently used share sales to fund its Bitcoin acquisitions and aims to continue doing so in the future.
In addition to its aggressive Bitcoin acquisition strategy, MicroStrategy introduced a new key performance indicator (KPI) called “BTC Yield.” This KPI is designed to target annual returns of 4-8% over the next three years from the company’s Bitcoin holdings. By introducing this KPI, MicroStrategy aims to provide shareholders and investors with a clear measure of its ability to generate returns from its substantial Bitcoin investments.
MicroStrategy’s decision to raise $2 billion through the sale of its class A shares for the purpose of acquiring more Bitcoin has significant implications for the company’s financial performance and long-term investment strategy. Despite facing losses and challenges, MicroStrategy remains dedicated to expanding its Bitcoin holdings and generating returns for its stakeholders through innovative metrics like BTC Yield.
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