MicroStrategy, the BTC development company, released its
Q3 earnings report, continuing to increase its BTC holdings. Its total BTC holdings are 252,220, with an average cost of $39,266 per BTC, and unrealized gains of $8.3 billion. MicroStrategy stated that it will raise an additional $42 billion in capital over the next three years to further support its BTC acquisition.
MicroStrategy to Raise $42 Billion in the Next Three Years
MicroStrategy announced its "21/21 Plan", aiming to increase its capital by $42 billion over the next three years, including $21 billion in equity and $21 billion in fixed-income securities. This plan will further support its BTC acquisition as part of its treasury reserve strategy.
Strengthening MicroStrategy's Capital Structure
MicroStrategy strengthened its capital structure through the following actions:
- Issued $1.01 billion of convertible preferred notes due 2028 and $1.1 billion of Class A common stock
- Repaid $500 million of senior secured notes due 2028 (with a high interest rate of 6.125%) and released all collateral (BTC) securing those notes
The annual fixed interest expense has significantly decreased from the previous $59 million to approximately $34.6 million. All adjusted debt is now convertible, with an average interest rate of only 0.811%.
Software Business Losses, BTC Not Marked to Fair Value
MicroStrategy's software business continues to be in a loss position, with revenue declining 10.3% year-over-year to $116.1 million. The operating loss reached $18.5 million.
MicroStrategy recognized a $412.1 million digital asset impairment charge and did not use fair value to account for the value of BTC, which has risen to $72K, resulting in $8.3 billion in unrealized gains not reflected in the financial statements.
MSTR Up 257% This Year
MicroStrategy's stock price has surged 257% this year, outperforming BTC's 70% gain. After a 10-for-1 stock split in early August, the stock price has continued to rapidly climb to $247.
