FameEX Hot Topics | Microstrategy Launches $42 Billion Plan for Major Bitcoin Investments

Microstrategy recently announced a significant $42 billion capital-raising plan designed to accelerate its Bitcoin acquisitions and reinforce its position as a leader in digital asset investments. The plan was revealed alongside the firm’s Q3 2024 financial report, outlining a new strategy that combines both equity and fixed-income offerings to facilitate these large-scale Bitcoin purchases.

President and CEO Phong Le described the initiative, stating, “Our focus remains on maximizing shareholder value by leveraging the digital transformation of capital. Today, we are launching a strategic goal of raising $42 billion in capital over the next three years, split equally between $21 billion in equity and $21 billion in fixed income, in what we’re calling our ‘21/21 Plan.’” This approach highlights the company’s dedication to its role as a Bitcoin Treasury Company, with plans to increase Bitcoin holdings as a reserve asset to achieve higher BTC yield.

Microstrategy’s Q3 2024 financial performance showed mixed results. Total revenue from its core software business reached $116.1 million, a decline of 10.3% from the previous year. However, subscription services saw growth, rising by 32.5% to reach $27.8 million. The firm recorded a gross profit of $81.7 million, achieving a margin of 70.4%, which was lower than the 79.4% margin in Q3 2023. Operating expenses, largely driven by digital asset impairment losses, surged by 301.6% to $514.3 million, leading to a net loss of $340.2 million. The firm’s cash reserves dipped slightly, standing at $46.3 million as of Q3 2024, down from $46.8 million in December 2023.

In terms of its Bitcoin holdings, Microstrategy expanded its position by 11% in Q3, achieving a year-to-date BTC yield of 17.8% while also reducing annualized interest expenses by $24 million. By September 30, 2024, the carrying value of Microstrategy’s digital assets—approximately 252,220 Bitcoins—was $6.851 billion. The original cost basis was $9.904 billion, while the market value had risen to $16.007 billion.

Despite experiencing revenue declines and a net loss, Microstrategy’s ambitious “21/21 Plan” underlines its commitment to growth and resilience, positioning it for future success through substantial Bitcoin investments.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.