MicroStrategy has announced a $21 billion at-the-market offering program, prompted by the need to sustain its Bitcoin acquisition strategy amidst market volatility.
$21 Billion ATM Offering Sets Record
MicroStrategy's ATM offering is one of the largest ever by a Bitcoin-focused company. The company plans to sell its 8% series A perpetual strike preferred stock, convertible to common stock, through various methods such as negotiated transactions and block trades. The offering is driven by growing funding needs to maintain its Bitcoin acquisition pace.
Recent Bitcoin Purchases Facing $3 Billion Loss
According to Lookonchain analysis, MicroStrategy currently faces unrealized losses of approximately $3 billion from Bitcoin purchases since November 2024. The purchases were made at an average price of $94,035, but current market prices are lower. However, the overall investment remains profitable as the average acquisition price is $66,357.
MicroStrategy’s Funding Strategy Raises Questions
MicroStrategy's decision to announce a $21 billion ATM offering raises questions about its strategy amidst significant paper losses. The issuance structure suggests an attempt to balance investor yield requirements with its long-term Bitcoin strategy. The timing of this capital raise highlights financial strain from recent acquisitions, necessitating further funding to continue its aggressive buying strategy.
The launch of MicroStrategy's $21 billion offering indicates its commitment to continuing Bitcoin investments despite market fluctuations and current paper losses.
