Keep Going All-In on Bitcoin! Strategy Announces ATM Stock Offering to Raise 42 Billion Dollars

To raise funds to buy more Bitcoin, MicroStrategy (stock symbol: MSTR) continues to expand its financing channels. The company announced a new “At-The-Market Offering (ATM)” plan for its common and preferred shares, aiming to raise $42 billion.

According to the Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) on Monday, MicroStrategy will sell up to $21 billion worth of common shares through this new ATM plan. At the same time, it will issue up to $21 billion worth of STRC preferred shares and $2.1 billion of STRK preferred shares.

Unlike traditional large-scale capital raises, ATM offerings allow MicroStrategy to sell shares in batches and gradually at market prices. In fact, since early last year, MicroStrategy has frequently relied on such fundraising tools for its “HODL strategy,” building an increasingly large issuance mechanism, including ATM financing linked to preferred stock products like STRF and STRD.

With these measures combined, MicroStrategy currently has a potential issuance capacity of hundreds of billions of dollars in equity and equity-linked products.

Unfazed by Paper Losses! MicroStrategy Continues to Bet Big on Bitcoin

While expanding its fundraising scale, MicroStrategy’s accumulation of Bitcoin has also continued unabated.

According to another filing, last week MicroStrategy spent about $76.6 million to buy 1,031 Bitcoin, increasing its holdings to 762,099 BTC. The funds for this latest purchase came from the proceeds of previous sales of MSTR common stock.

So far, MicroStrategy has spent approximately $57.7 billion to acquire Bitcoin. However, based on recent market prices, the overall position has fallen below the cost basis. Data platform SaylorTracker, which tracks the company’s holdings, reports that MicroStrategy’s Bitcoin position currently shows an unrealized loss (paper loss) of over $3.2 billion.

This ATM fundraising plan is actually part of MicroStrategy’s “42/42 Plan,” which aims to raise $84 billion by 2027 through issuing stock and convertible bonds to continue increasing Bitcoin holdings.

Cash Flow and Dividend Pressure Emerge

However, this extreme financial leverage operation hides significant concerns.

Analyst Ivan Wu of The Block pointed out that if the entire $21 billion STRC preferred stock plan is utilized, MicroStrategy would face an additional annual dividend burden of about $2.4 billion. Including the existing approximately $1 billion in dividend obligations, the company’s current cash reserves are only enough to cover about eight months of dividend payments.