MicroStrategy seeks share increase by billions for more bitcoin purchase

MicroStrategy, a software development company and the largest corporate owner of bitcoin, proposed increasing its shares of Class A common stock and preferred stock for better execution of its bitcoin strategy.

The proposal seeks to increase of Class A common shares from 330 million to 10.33 billion, and the increase of preferred shares from 5 million to 1.005 billion, according to the company’s proxy 14A statement with the Securities and Exchange Commission.

MicroStrategy said that the proposed increase of shares would support the company’s "21/21" plan, which is a three-year $42 billion capital plan that aims to raise $21 billion of equity capital and $21 billion of fixed-income instruments, including debt, convertible notes and preferred stock. The 21/21 plan backs MicroStrategy’s future purchase of bitcoin.

The statement also detailed other proposals from the company, including a new equity incentive plan that would give automatic equity award grants to new directors.

In an 8-K report filed last Friday, MicroStrategy expanded its board of directors from six to nine members by adding Brian Brooks, Jane Dietze and Gregg Winiarski. Brooks was the CEO of Binance for three months in 2021, while Dietze has been a part of Galaxy Digital’s board of directors since 2022.

“The proposals we are asking you to consider reflect a new chapter in our evolution as a bitcoin treasury company and our ambitious goals for the future,” the statement said.

The exact date of the special stockholder meeting for voting on the proposals has not been announced, though it is slated for 2025.

With its first bitcoin purchase in 2020, Michael Saylor, co-founder of MicroStrategy, declared that the company would adopt bitcoin as its primary treasury asset. 

Saylor announced on Monday that the company acquired an additional 5,262 bitcoin for roughly $561 million at an average price of $106,662 per bitcoin. MicroStrategy now owns 444,262 BTC, which is currently worth over $41.6 billion.

While news of MicroStrategy’s bitcoin purchase typically led to an uptick in its stock price, it fell 8.78% at closing on Monday to $332.23, losing 17.6% over the past month, according to Google Finance data . Nonetheless, Microstrategy shares have grown 450% in the past year.

Meanwhile, the price of bitcoin dropped 1.6% in the past 24 hours to $93,932 as of 10:30 p.m. EST, according to The Block’s bitcoin price page .