MicroStrategy seeks shareholders vote to support for $42B Bitcoin acquisition, stock up 1.3% in premarket

MicroStrategy Inc. announced a special shareholder meeting on Monday to vote on proposals to support its $42 billion Bitcoin purchase plan.

In a filing with the SEC, executive chairman Michael Saylor proposed increasing the company's authorized Class A shares from 330 million to 10.33 billion, as well as raising the number of authorised preferred shares from 5 million to 1.005 billion.

The proposed changes are intended to help MicroStrategy raise capital through equity financing and fixed-income securities to fund its ambitious Bitcoin acquisition strategy.

In October 2024, the company unveiled the ambitious three-year $42 billion capital plan, the 21/21 Plan, aimed at raising $21 billion in equity capital and $21 billion through fixed-income instruments, such as debt, convertible notes, and preferred stock to buy Bitcoins.

Saylor noted that the proposals would provide the company with more flexibility to raise capital in favourable market conditions.

Proposal 1, which aims to increase the number of authorised shares of Class A common stock, gives the company the flexibility to issue common equity or convertible instruments as needed to raise capital based on market conditions.

Proposal 2, which seeks to increase the number of authorised shares of preferred stock, allows the company to issue preferred stock with terms set by the Board of Directors.

This will expand the types of securities the company can offer under the 21/21 Plan, depending on market conditions.

MicroStrategy's Bitcoin bet

MicroStrategy has been on a Bitcoin-buying spree, with its holdings now totalling 444,262 BTC, worth over $27 billion.

The company's stockpile increased by an additional 5,262 BTC on Monday, as it continues to make Bitcoin a central part of its strategy.

On Monday, MicroStrategy announced the sale of $561 million in common stock to purchase an additional 5,262 Bitcoins at an average price of $106,662 per coin.

In the past three weeks, MicroStrategy has purchased a total of 42,162 BTC, worth around $4 billion.

The average price paid for the new Bitcoin stash is approximately 12% above the current market levels.

MicroStrategy's stock slips on Monday

MicroStrategy's stock has been on a downward trajectory despite its inclusion in the Nasdaq 100 Index.

On Monday, the MSTR stock price corrected by 8.78%, falling to $332 levels.

This move has extended its weekly losses to 19% and monthly losses to 17.65%.

From its all-time high of $472 in November, the MSTR stock has corrected by 30%. However, it is still up a massive 384% since the beginning of 2024.

In pre-market trading on Tuesday, the stock is up around 1.3%.

Bitcoin's recent speed bump

Following last week’s all-time high of $108,000, Bitcoin has faced increased selling pressure.

Over the last 24 hours, BTC has corrected by another 1.5%, extending its weekly losses to close to 12%.