MicroStrategy to raise $2 billion via Class A shares for additional Bitcoin purchases

MicroStrategy, the world’s largest public Bitcoin holder, has announced plans to raise up to $2 billion by selling its Class A shares.

The company made the disclosure in a regulatory filing with the US Securities and Exchange Commission on August 1.

Details of the presentation

MicroStrategy has not disclosed the specific timeline for the sale of its Class A shares. However, the company stated in its filing that the funds raised will be allocated for “general corporate purposes, including the acquisition of Bitcoin “.

They stressed that the net proceeds from the sale of shares are used for these purposes, unless otherwise specified in future filings.

The company also did not clarify the amount of proceeds that will be allocated for Bitcoin purchases, stating, “We have not determined the amount of net proceeds that will be used specifically for any particular purpose.” MicroStrategy added that management will retain broad discretion over the allocation of the net proceeds of any offering.

MicroStrategy has consistently used stock sales to fund its Bitcoin acquisitions, with several reports confirming the company’s multimillion-dollar investments in the cryptocurrency.

MicroStrategy’s second quarter results

This announcement coincides with MicroStrategy’s release of its second quarter financial results, which showed a second consecutive quarterly loss caused by an impairment charge on its Bitcoin holdings worth about $14.5 billion.

Shares of MicroStrategy ( MSTR ) fell more than 6.3% to $1,511 after the financial report was released, according to data from Google Finance.

According to Bloomberg, the company reported a net loss of $102.6 million, or $5.74 per share, compared with net income of $22.2 million, or $1.52 per share, the same quarter of 2023.

The company’s revenue from its software business for the quarter was $111.4 million, below analysts’ expectations of $119.3 million. MicroStrategy’s impairment losses on digital assets reached $180.1 million in the quarter, a significant increase from $24.1 million in the same period last year.

During the second quarter, MicroStrategy acquired 12,222 BTC, spending more than $805 million at an average price of $65,880 per BTC. This acquisition brings the company’s total Bitcoin holdings to 226,500 BTC, acquired at a cumulative cost of $8.3 billion as of July 31.

MicroStrategy also introduced a new key performance indicator (KPI) called “BTC Yield”, which targets annual returns of 4-8% over the next three years. This KPI is intended to provide a clear measure of the company’s ability to generate returns on its Bitcoin holdings.

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