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ToggleMicroStrategy Acquires 2,138 BTC, Total Holdings Reach 446,400 BTC
MicroStrategy announced that it purchased 2,138 BTC for approximately $209 million between December 23, 2024 and December 29, 2024. This acquisition brings the company's total BTC holdings to a staggering 446,400 BTC, with a cumulative purchase price of approximately $27.9 billion.
The following details the company's announcement, key performance metrics, and the impact on its BTC strategy.
Large-Scale BTC Acquisition Funded by Stock Sale Proceeds
During this week-long period, MicroStrategy utilized the proceeds from the sale of its Class A common stock under an equity sales agreement signed in October 2024 to fund the BTC acquisition. The company raised net proceeds of $209 million from this stock sale, which were used to purchase BTC at an average price of $97,837 per BTC, including fees.
This strategy is consistent with MicroStrategy's long-standing practice of using equity capital to expand its BTC reserves. As of December 29, 2024, the company still has approximately $6.88 billion in stock available for future issuance under this sales agreement.
MicroStrategy BTC Holdings Reach New All-Time High
MicroStrategy's BTC holdings have now reached a new all-time high of 446,400 BTC, a significant increase from the 189,150 BTC held at the end of 2023. The average purchase price of the company's total BTC holdings is $62,428, reflecting its disciplined approach to accumulating BTC over the long term.
MicroStrategy Reports Strong BTC Yield in Q4 and Full Year
One of the standout metrics in this report is MicroStrategy's BTC Yield, a key performance indicator used to measure the effectiveness of its BTC acquisition strategy. For the fourth quarter of 2024 (quarter-to-date, QTD), the company reported a BTC Yield of 47.8%, and a year-to-date (YTD) yield of 74.1%.
The BTC Yield is calculated based on the percentage change in the company's BTC holdings relative to its diluted shares outstanding during the period. This metric is important for evaluating how effectively the company is using its equity capital to create value for shareholders through BTC purchases.
Stock Issuance Strategy Supports BTC Acquisition
MicroStrategy's stock issuance strategy has provided crucial financial support for its BTC acquisitions. In December 2024 alone, the company sold 592,987 shares of its stock through its at-the-market equity offering program, raising $209 million. After a 10-for-1 stock split earlier in the year, MicroStrategy now has approximately 245,459 shares of basic outstanding stock.
The company has also optimized its capital structure through the issuance of convertible debt instruments, further enhancing its BTC Yield.
In-Depth Analysis of MicroStrategy's BTC Yield Metric
The BTC Yield is not a traditional financial metric, but rather a performance indicator designed by MicroStrategy to evaluate the effectiveness of its BTC strategy. While the BTC Yield reveals the efficiency of the company's use of equity capital for BTC purchases, it also has limitations. For example, the BTC Yield does not account for the company's debt or other liabilities, and assumes that all convertible debt will be converted to equity.
Additionally, the BTC Yield does not reflect the company's operational performance or liquidity, and instead focuses solely on the efficiency of equity value creation.
Strategic Implications for MicroStrategy
MicroStrategy's unwavering commitment to increasing its BTC holdings has positioned the company as a leader in the cryptocurrency space. Its strategy of using equity capital to acquire BTC reflects a strong belief in the long-term value of the asset. With a BTC reserve of 446,400 BTC, MicroStrategy has established itself as a pioneer in BTC adoption among publicly traded companies.
However, this strategy is not without risk. The company's heavy reliance on BTC exposes it to significant volatility in the cryptocurrency market. Additionally, the BTC Yield metric may not be universally accepted by all investors, as it does not directly measure operational or financial performance.
Risk Warning
Cryptocurrency investments carry a high degree of risk, and the price may fluctuate significantly. You may lose your entire principal. Please carefully evaluate the risks.
