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MicroStrategy to Issue 10B MSTR Shares to Fund Bitcoin Buys – Will it Boost BTC?
In a recent filing with the US Securities and Exchange Commission (SEC), MicroStrategy, a pioneer in corporate Bitcoin treasuries, has announced its plan to increase its share count by a staggering 3,030% to accelerate its aggressive Bitcoin acquisition strategy. The company aims to raise capital through equity issuance and debt instruments to execute its ’21/21 Plan’, which targets $42 billion in funding over the next three years.
Under this proposal, MicroStrategy would increase the number of authorized Class A common stock from 330 million to a massive 10.3 billion shares. Similarly, the preferred stock count would rise from the current 5 million to 1 billion shares. This drastic expansion is intended to provide the necessary capital for the company’s Bitcoin acquisition program.
Industry experts and market observers are divided on the implications of this move on the Bitcoin price. While some believe that the increased supply of MSTR shares could lead to a significant increase in the demand for Bitcoin, others fear that it may dilute the value of the stock.
Joe Burnett, director of market research at Unchained, is bullish on the prospects of the micro-cap stock and the broader cryptocurrency market. According to him, MicroStrategy’s aggressive move will likely push the price of Bitcoin higher due to the sheer scale of their investments. “MSTR wants to issue 10 billion more shares,” Burnett explained. “At current market prices, that would be $3.3 trillion—or approximately 36 million Bitcoins… I’m guessing the price of Bitcoin will be going much, much higher.”
Despite concerns over the potential dilution effect on MSTR’s value, analysts believe that the company’s strategy may have a lasting impact on the broader crypto space. Since announcing its ’21/21 Plan’, MicroStrategy has already acquired 192,042 Bitcoins, including the latest purchase of 5,262 BTC announced on December 23rd. This recent move resulted in a 11% pump in MSTR, highlighting the potential for Bitcoin’s price to follow suit.
MicroStrategy currently holds an impressive portfolio of 444,262 BTC, worth approximately $42 billion at current prices. This massive acquisition has seen MSTR’s stock value surge by a staggering 263% year-to-date (YTD), more than double the 112% growth exhibited by Bitcoin itself.
While opinions are split on the short-term implications of this move, one thing is clear: MicroStrategy’s aggressive Bitcoin strategy will have far-reaching consequences for both the cryptocurrency market and its own stock.
Source: ambcrypto.com
