This plan involves raising $21 billion in equity and another $21 billion in fixed-income securities over the next three years. As of now, $42 billion in Bitcoin is nearly 578,586 BTC, representing around 2.7% of the total supply of the coin.
The Goal Is To Achieve A Higher BTC Yield
At the company’s third-quarter earnings press release, Phong Le, the president and CEO of MicroStrategy, stated that this capital would enhance the company’s returns from its Bitcoin investments.
He explained that as a “Bitcoin Treasury Company,” the goal is to use this new funding to acquire more Bitcoin as a reserve asset, which would help increase the company’s Bitcoin yield.
Currently, MicroStrategy has a year-to-date yield of 17.8% and aims for an annual yield of 6% to 10% from 2025 to 2027.
Crypto analyst BitcoinMiningStockGuy expressed positive views on the plan, noting that the $21 billion figure is identical to an aggregation of the total market value of all public miners.
Additionally, volatility analyst Ryan McGinnis commented that MicroStrategy’s strategy represents ‘escape velocity’ while questioning the extent of the gap between SMSTR and a combination of other public companies and even nations.
In September, MicroStrategy completed a $1.01 billion offering of 0.625% convertible senior notes due in 2028, with plans to use part of the funds for Bitcoin acquisition.
This private offering attracted institutional investors and allowed for conversion to cash or MicroStrategy shares.
Not long ago, BTC Republic reported that MicroStrategy’s Bitcoin holdings stood at $14.7 billion, according to the company’s second-quarter earnings report.
Highlights Of MicroStrategy’s Third Quarter 2024 Financial Results
According to Andrew Kang, CFO of MicroStrategy, ‘In the third quarter of 2024, MicroStrategy experienced another significant period, raising $2.1 billion in equity and debt. Our successful approach to using careful borrowing forms the basis for our three-year 21/21 Plan.’
Through our treasury strategy, we increased our bitcoin holdings by 11% this quarter, lifted our year-to-date Bitcoin yield to 17.8%, and decreased our total annual interest costs by $24 million.
On August 7, 2024, the Company executed a 10-for-1 stock split for its class A and class B shares. All share data from previous periods has been adjusted to reflect this stock split.
The ‘BTC Yield’ KPI shows MicroStrategy has achieved a BTC Yield of 17.8% year-to-date in 2024. The Company plans to adjust its long-term target to a BTC Yield of 6% to 10% for the years 2025 to 2027.
BTC Yield is an important performance measure for the Company, helping to evaluate its strategy for acquiring Bitcoin in ways believed to benefit shareholders.
As of September 30, 2024, the Company’s digital assets, which include around 252,220 Bitcoins, had a carrying value of $6.851 billion.
The original cost and market value of these Bitcoins were $9.904 billion and $16.007 billion, respectively. This indicates an average cost per Bitcoin of about $39,266 and a $63,463 market price per Bitcoin.
