MicroStrategy Expands Bitcoin Holdings Amid Revenue Decline

$MSTR

MicroStrategy (NASDAQ: MSTR) recently revealed its “2121 Plan” in its third-quarter earnings report, which outlines a strategy to raise $42 billion over the next three years. This capital will be obtained through a combination of $21 billion in equity and $21 billion in fixed-income securities. The plan aims to strengthen the company’s position in the market by increasing its Bitcoin reserves and targeting an annual yield of 6% to 10% from 2025 to 2027, a reduction from the previously estimated 17.8% yield for 2024.

Phong Le, President and CEO of MicroStrategy, indicated that the additional capital will be used to enhance Bitcoin holdings and improve yield on these assets. In the third quarter ending September 2024, the company raised $2.1 billion through equity and debt offerings, leading to an 11% increase in its Bitcoin holdings. As of September 2024, MicroStrategy’s portfolio consisted of approximately 252,220 Bitcoin units, a rise from 226,500 units reported in the previous quarter.

However, despite these strategic efforts, the company’s financial performance faced difficulties. Analysts had predicted a 6.2% decline in revenue year-over-year for the third quarter, but the actual results reflected a more significant drop of 10.3%, with revenue decreasing to $116.1 million. Additionally, MicroStrategy reported an adjusted loss of -$1.56 per share, which was notably worse than the expected loss of -$0.02 per share, highlighting potential challenges related to its Bitcoin investments.

This financial outcome emphasizes the risks associated with MicroStrategy’s substantial investment in Bitcoin, especially amid market volatility. Nevertheless, with Bitcoin currently priced around $72,000, the value of MicroStrategy’s holdings exceeds $18 billion, affirming its status as the largest publicly traded corporate holder of Bitcoin.

**DISCLAIMER: THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE INTERPRETED AS INVESTMENT ADVICE. INVESTING INVOLVES RISK, INCLUDING THE POTENTIAL LOSS OF PRINCIPAL. READERS ARE ENCOURAGED TO CONDUCT THEIR OWN RESEARCH AND CONSULT WITH A QUALIFIED FINANCIAL ADVISOR BEFORE MAKING ANY INVESTMENT DECISIONS.**