MicroStrategy wants to boost stock sale capacity to buy bitcoin

Investing.com — MicroStrategy Incorporated (NASDAQ:MSTR) is asking shareholders to approve an increase in its authorized shares of class A common stock and preferred stock in order to raise funds to buy more bitcoin, according to its regulatory filing.  

The company plans to increase its authorized class A common stock from 330 million shares to 10.33 billion shares and its authorized preferred stock from 5 million to 1.005 billion shares.

The proposals, set to be voted on at a special meeting, are tied to MicroStrategy’s 21/21 Plan, a three-year, $42 billion capital initiative announced in October 2024. Under the plan, the company aims to raise $21 billion through equity offerings and $21 billion via fixed-income instruments, including debt and convertible notes, with the proceeds earmarked for further bitcoin acquisitions.

By leveraging both equity and convertible debt while capitalizing on its equity premium, the company has managed to grow its bitcoin holdings at a faster pace than its share dilution.