Microstrategy to raise $2 billion in Class A shares for additional Bitcoin purchases

Microstrategy, the world's largest public bitcoin holder, has announced plans to raise up to $2 billion by selling Class A shares.

The company disclosed this in a regulatory filing with the US Securities and Exchange Commission on August 1.

From providing details

Microstrategy did not specify when it would sell the Class A shares. But the company said in a filing that the money raised will be used for “general corporate purposes, including the purchase of Bitcoin.”

They emphasized that the net proceeds from the sale of shares are earmarked for these purposes unless otherwise specified for future records.

“We have not determined the amount of net proceeds to be used for any particular purpose,” the company said. He did not disclose the amount of revenue paid for Bitcoin purchases. MicroStrategy added that management expects broad discretion in allocating net proceeds from any offering.

MicroStrategy has consistently used stock sales to fund bitcoin purchases, with multiple reports confirming the company's multi-million dollar investments in the cryptocurrency.

Micro strategy Q2 results

This announcement coincides with MicroStrategy's release of its Q2 financial results, which reported a second consecutive quarterly loss with Bitcoin holdings of around $14.5 billion.

Shares of MicroStrategy ( MSTR ) fell more than 6.3% to $1,511 following the release of the financial report, according to data from Google Finance.

According to Bloomberg, the company It reported a loss of $102.6 million, or $5.74 per share, compared to net income of $22.2 million, or $1.52 per share, in the same quarter of 2023.

The company reported revenue from its software business of $111.4 million in the quarter, falling short of analysts' expectations of $119.3 million. Microstrategy's deficit from digital asset losses totaled $180.1 million in the quarter, up from $24.1 million in the same period last year.

During Q2, MicroStrategy acquired 12,222 BTC, spending more than $805 million at an average price of $65,880 per BTC. This acquisition brings the company's total Bitcoin holdings to 226,500 BTC as of July 31, at a total cost of $8.3 billion.

MicroStrategy also introduced a new Key Performance Indicator (KPI) “BTC yield”, targeting annual revenues of 4-8 percent over the next three years. This KPI aims to provide a clear measure of a company's ability to generate returns from its bitcoin holdings.