In a massive development, MicroStrategy, now known as Strategy, has announced plans to raise $21 billion to buy more Bitcoin. The company intends to offer its preferred stock to raise this capital for its BTC acquisition plans.
MicroStrategy To Raise $21 Billion To Buy More Bitcoin
In a press release, MicroStrategy revealed plans to raise up to $21 billion to buy more Bitcoin. This followed the company’s announcement that it has entered into a sales agreement, which allows them to issue and sell shares of its 8.00% series A perpetual strike preferred stock at $0.001 par value per share, which sums up to $21 billion.
Strategy revealed that it expects to sell perpetual strike preferred stock pursuant to the at-the-market (ATM) Program in a “disciplined manner” over an extended period. The company will take into account the trading price and trading volumes of the perpetual strike preferred stock at the time of sale.
MicroStrategy specifically mentioned that it intends to use the net proceeds from the ATM Program for general corporate purposes, including acquiring Bitcoin and working capital.
This development comes just a week after Strategy announced that it failed to buy Bitcoin the prior week. This move was out of character, considering that the company has made BTC purchases almost every week since the start of the year. Michael Saylor’s company currently holds 499,096 bitcoins, which it acquired for $33.1 billion at an average price of $66,357 per BTC.
How Prices Reacted Following The Announcement
The Bitcoin price briefly surged to as high as $84,000 on the back of MicroStrategy’s announcement. The announcement undoubtedly provides a bullish outlook for the flagship crypto, although the buy pressure is unlikely to impact prices since the company buys its BTC over-the-counter.
Meanwhile, the MSTR stock price failed to react positively to this announcement and is currently trading at around $271, down over 5% in pre-market trading.
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