MicroStrategy Acquires 1,070 Bitcoin for $101 Million Investment
MicroStrategy has acquired an additional 1,070 BTC for $101 million, boosting its total holdings to 447,470 BTC valued at $45.3 billion. This purchase occurred around December 30 when Bitcoin was priced at $94,000, contributing to a 3.6% surge in Bitcoin's price past $100,000 and a 4.5% increase in MicroStrategy's stock (MSTR), which surpassed $350.
This acquisition marks the first since the company announced plans to raise funds through perpetual preferred stock, continuing its nine-week buying streak led by executive chairman Michael Saylor. The average purchase price for their Bitcoin holdings is $62,470, yielding a 62% profit overall.
Despite reporting $1 billion in impairment losses for Q4, MicroStrategy is transitioning to fair-value accounting, increasing its balance sheet from $17.9 billion to just under $24 billion. For Q4 2024, the company reported a Bitcoin yield of 48% and 74.3% for FY 2024.
Benchmark Analysts See 91% Upside In MicroStrategy (MSTR) Stock
In 2024, MSTR stock experienced a 330% rally, outperforming Bitcoin by three times. Benchmark analysts maintain a "buy" rating with a price target of $650, indicating a 91% upside based on the company's expanding Bitcoin assets and software business potential.
Benchmark analyst Mark Palmer stated, “We believe MSTR’s plan to tap the perpetual preferred market underscores the shareholder value it has been creating through its treasury operations, which helps to justify the premium to the company’s net asset value at which its stock trades.”
MicroStrategy plans to raise $2 billion in Q1 2025 through offerings of perpetual preferred stock, aimed at achieving a broader capital goal of $42 billion by 2027 via at-the-market stock sales and convertible debt offerings. Saylor noted that two-thirds of the equity-raising target has already been met. The issuance of perpetual preferred stock may attract conservative investors like insurance companies and pension funds looking for lower-volatility options.