21/21 Plan: MicroStrategy to Raise $42 Billion to Buy More Bitcoin

Business Intelligence company MicroStrategy is looking to raise $42 billion over the next three years to purchase additional Bitcoin.

Background

• Dubbed the 21/21 plan, the firm intends to raise $21 billion in equity and another $21 billion via fixed-income securities offerings
• With BTC trading at $72.5k, $42 billion worth of the asset would translate to ~579k coins
• In hindsight, that’d be 2.7% of the asset’s total supply

Why should you pay attention?

• Via the company’s treasury strategy, MicroStrategy increased its BTC holdings by 11% in Q3
• In retrospect, its YTD BTC yield notched to 17.8%
• Andrew Kang, the firm's Chief Financial Officer brought to light that this initiative reduced MSTR's total annualized interest expense by $24 million
• The firm plans to achieve an annual BTC yield of 6% to 10% between 2025 and 2027

Who said what?

• Phong Le, the company’s President and CEO affirmed,

“Our focus remains to increase value generated to our shareholders by leveraging the digital transformation of capital”

• He added,

"As a Bitcoin Treasury Company, we plan to use the additional capital to buy more Bitcoin as a treasury reserve asset in a manner that will allow us to achieve higher BTC Yield”

Zooming out

• Before this, the firm announced the purchase of 7,420 BTC in mid-September
• At the time, its holdings rose to 252,220 BTC, acquired for $9.9 billion at an average price of $39,266 apiece
• At the current market price, the firm’s stash is worth more than $18 billion