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 through the sale of its class A shares.

The company made this revelation in a regulatory filing with the U.S. Securities and Exchange Commission on August 1.

Details From the Filing

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 would be allocated for “general corporate purposes, including the acquisition of Bitcoin.”

They emphasized that the net proceeds from the stock sale are intended for these purposes unless otherwise specified in future filings.

The company also did not clarify the amount of the proceeds that will be allocated for Bitcoin purchases, stating, “We have not determined the amount of net proceeds to 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 share sales to finance its Bitcoin acquisitions, with multiple reports confirming the company’s multi-million dollar investments in the cryptocurrency.

MicroStrategy’s Q2 Results

This announcement coincides with MicroStrategy’s release of its Q2 financial results, which showed a second consecutive quarterly loss caused by an impairment charge on its Bitcoin holdings worth around $14.5 billion.

According to data from Google Finance, MicroStrategy shares (MSTR) dropped by more than 6.3% to $1,511 following the release of the financial report.

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

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

During Q2, MicroStrategy acquired 12,222 BTC, spending over $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,” targeting annual returns of 4-8% over the next three years. This KPI aims to provide a clear measure of the company’s ability to generate returns from its Bitcoin holdings.