MicroStrategy Plans to Raise $21 Billion to Fund More Bitcoin(BTC) Purchases
- MicroStrategy aims to raise $21B through preferred stock sales.
- Company to use proceeds for Bitcoin acquisition and corporate needs.
- Bitcoin price briefly surged following the $21B fundraise announcement.
MicroStrategy has announced plans to raise up to $21 billion through the sale of its new perpetual strike preferred stock. The company intends to use the proceeds to acquire additional Bitcoin and continue its strategy of expanding its crypto holdings. This move comes shortly after the companys announcement of a sales agreement, which allows it to issue these preferred stocks at a par value of $0.001 per share.
MicroStrategy Seeks $21B to Fund Bitcoin Purchases
The company has revealed that it plans to offer these stocks under the at-the-market (ATM) program. The sales will take place over an extended period, with the price and volume of the stocks determined by market conditions. MicroStrategy has emphasized that the funds raised will be used for general corporate purposes, including further Bitcoin acquisitions.
MicroStrategys latest announcement follows its long-term strategy of increasing Bitcoin holdings, to strengthen its position in the cryptocurrency market. The company currently holds 499,096 BTC, valued at approximately $41 billion which makes it the largest corporate holder of BTC. The additional $21 billion raised through this offering will increase the companys BTC holdings.
Market Reaction to Microstrategys Announcement
The companys stock price did not respond favorably to the announcement. MicroStrategys stock, listed under the ticker symbol MSTR, has seen a decrease in value, falling by over 14% in the past month. The stock price also dropped by more than 5% following the news.
However, the price of Bitcoin briefly surged to reach $84,000. However, this spike in value may not have a lasting impact on the broader market. MicroStrategy acquires BTC through over-the-counter (OTC) transactions which limits the direct influence of its purchases on the public market.
On-chain data shows that large whales have also been accumulating significant amounts of BTC. In the past 72 hours, whales have bought over 22,000 BTC, capitalizing on current market dip.
MicroStrategys strategy has proven effective in increasing its BTC holdings. The companys decision to issue preferred stocks provides a new avenue for raising capital. This reflects an innovative approach to secure funding and remain focused on its Bitcoin acquisition strategy.
As MicroStrategy continues to grow its BTC holdings, the broader market may see further institutional interest. The companys stock price may face short-term volatility, its long-term commitment to Bitcoin suggests it will remain a major player in the crypto space.
Read more: https://www.tronweekly.com/strategy-to-raise-21b-for-bitcoin-purchases/
Text source: TronWeekly
