MicroStrategy Co-Founder Michael Saylor Hints at Impending Bitcoin Acquisition
On January 5th, MicroStrategy co-founder Michael Saylor posted a Bitcoin chart from the SaylorTracker website, which he typically shares on Sundays before making a significant purchase. The tech mogul hinted that "something about SaylorTracker.com is not quite right," leaving his followers wondering if this was more than just a casual observation.
A Familiar Pattern Emerges
Saylor had posted the same chart one week prior, on Sunday, December 29th. Interestingly, MicroStrategy made a substantial purchase of 2,138 BTC at an average price of $97,837 per coin on December 30th. This transaction was in line with the company’s ambitious plan to acquire $42 billion worth of Bitcoin through a combination of equity and fixed-income securities.
The 21/21 Plan: Financing the Acquisition
MicroStrategy’s plan to finance its massive Bitcoin acquisition involves issuing $21 billion in equity and $21 billion in fixed-income securities. This is part of their "21/21" strategy, which aims to acquire a significant portion of the company’s treasury with Bitcoin. The tech firm has been actively pursuing this goal, and Saylor’s hint at an impending purchase suggests that they may be preparing for another large acquisition.
Listing on Nasdaq 100: Indirect Exposure to Bitcoin
On December 23rd, MicroStrategy entered the Nasdaq 100, a weighted stock market index of the 100 largest companies listed on the Nasdaq exchange. This move allows traditional investors holding these funds through exchange-traded funds (ETFs) to gain indirect exposure to Bitcoin. As part of this inclusion, MicroStrategy called for a special shareholders meeting to increase the number of shares available to finance their corporate treasury strategy.
Seeking Shareholder Approval: Increasing Authorized Shares
According to a December 23rd filing with the Securities and Exchange Commission (SEC), MicroStrategy requested that shareholders approve an increase in class A common stock from 330 million shares to 10.3 billion shares. The company also sought approval for an increase in authorized preferred stock from 5 million shares to over 1 billion shares.
A Separate $2 Billion Raise: Perpetual Preferred Stock Offering
On January 4th, MicroStrategy announced plans to raise $2 billion through a perpetual preferred stock offering. This offering will give investors senior status to class A common stock in the event of bankruptcy and priority over equity holders during financial distributions in a corporate liquidation. It’s essential to note that this proposed raise is separate from the company’s core 21/21 plan and is expected to take place in Q1 2024, pending approval.
Implications for Investors
As MicroStrategy continues to pursue its ambitious Bitcoin acquisition strategy, investors should closely monitor their share prices and performance. The inclusion of the company in the Nasdaq 100 has created opportunities for indirect exposure to Bitcoin through traditional investments. However, it’s crucial to understand that this move also carries risks and potential implications for investors.
The Rise of MicroStrategy
MicroStrategy’s entry into the Nasdaq 100 is a testament to the company’s growth and influence in the technology sector. As one of the largest publicly traded companies dedicated to acquiring Bitcoin, MicroStrategy has established itself as a leader in the digital asset space. The tech firm’s commitment to creating value through its corporate treasury strategy will likely continue to shape the market and inspire other companies to follow suit.
Conclusion
Michael Saylor’s hint at an impending Bitcoin acquisition is just one aspect of MicroStrategy’s ongoing efforts to create significant value for its shareholders. As the company continues to pursue its 21/21 plan, investors should be prepared for potential changes in share prices and market dynamics. The implications of this move are far-reaching, and it will be essential for all stakeholders to carefully monitor developments as they unfold.
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