MicroStrategy Inc., the software company turned Bitcoin investment powerhouse, has announced its latest Bitcoin acquisition, adding 1,070 BTC to its holdings for $101 million. This marks the ninth consecutive week of Bitcoin purchases by the company, bringing its total holdings to 447,470 BTC, valued at approximately $44.3 billion. The average purchase price for the recent acquisition was $94,000 per Bitcoin, according to filings with the U.S. Securities and Exchange Commission (SEC).

In addition to its Bitcoin purchase, MicroStrategy disclosed plans to raise up to $2 billion through a preferred stock offering, expected to take place in Q1 2025. The offering is intended to provide capital for further Bitcoin acquisitions and will be senior to the company’s Class A common stock. This initiative is part of a broader strategy to raise $42 billion by 2027 through equity and debt markets.

Michael Saylor, the company’s executive chairman and co-founder, has been a vocal proponent of Bitcoin, positioning MicroStrategy as a leveraged proxy for the cryptocurrency. Saylor teased the announcement on social media, reiterating his commitment to advancing the company’s Bitcoin-focused strategy. Analysts have noted that the volatility of Bitcoin and MicroStrategy’s stock is integral to the company’s ability to access capital markets, particularly through convertible bonds.

“Volatility enables MicroStrategy to tap into the capital markets and execute its strategy more effectively,” said Mark Palmer, an analyst at Benchmark.

MicroStrategy’s approach has faced scrutiny from investors concerned about share dilution. The company has proposed increasing its authorized shares of Class A common stock from 330 million to 10.3 billion to support its Bitcoin purchasing strategy. A vote on this proposal is scheduled for January 21. While the amendment is expected to pass, analysts caution that it could heighten stock volatility.

Adam Kobeissi, founder of The Kobeissi Letter, highlighted the tension among investors: “It’s a lose-lose. If the authorization passes, investors fear dilution. If it doesn’t, the strategy to buy Bitcoin may falter.”

MicroStrategy’s purchases come amid fluctuating Bitcoin prices, which reached a high of $108,316 in December but have since traded around $100,000. The company’s stock, which closed at $330.66 on Friday, has similarly seen significant swings, reflecting both the volatility of Bitcoin and investor sentiment regarding the company’s financial maneuvers.

While some analysts view the stock’s recent decline as an overreaction, others emphasize the importance of maintaining flexibility in raising capital. Despite these challenges, MicroStrategy’s opportunistic rather than programmatic approach to Bitcoin acquisitions remains central to its long-term strategy.

“The company’s strategy is aggressive but aligned with its goals,” said Palmer. “The focus on Bitcoin as a treasury reserve asset positions MicroStrategy uniquely in the market.”

With the upcoming vote on share increases and the execution of the preferred stock offering, MicroStrategy is poised to continue its Bitcoin acquisition strategy. The company’s success will depend on its ability to balance investor concerns with its ambitious plans for leveraging Bitcoin’s growth.

CoinDesk Article