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MicroStrategy Corp. (MSTR-4.26%, a prominent advocate for Bitcoin, saw its shares fall by nearly 5% in after-hours trading following news that the business intelligence firm intends to continue expanding its Bitcoin holdings despite a downturn in overall revenue.
Founded by former dot-com entrepreneur Michael Saylor, MicroStrategy has long advocated for Bitcoin, which is now part of its business model. In its third-quarter earnings report, MicroStrategy referred to itself as a “Bitcoin treasury company” and announced plans to raise $42 billion in capital over the next three years through a balanced mix of $21 billion in equity and $21 billion in fixed-income securities—an initiative the company calls its “21/21 Plan.”
The company reported a year-to-date BTC yield of 17.8% for 2024 and announced a revision of its long-term target, aiming for an annual BTC yield of 6% to 10% from 2025 to 2027.
“As a Bitcoin Treasury Company, we plan to use the additional capital to buy more bitcoin as a treasury reserve asset in a manner that will allow us to achieve higher BTC Yield,” said Phong Le, MicroStrategy’s President and CEO, in a statement.
The company announced it had raised $2.1 billion through equity and debt, increasing its Bitcoin holdings by 11% over the three-month period. For the third quarter ending in September 2024, analysts anticipated a 6.2% year-over-year revenue decline to $121.5 million.
However, the company reported total revenue of $116.1 million, marking a 10.3% drop compared to the same period last year. While an adjusted loss of -$0.02 per share was expected, the company instead reported a significantly larger adjusted loss of -$1.56 per share.
As the largest publicly traded corporate holder of Bitcoin, MicroStrategy held approximately 252,220 Bitcoin as of September 2024, marking an increase from the 226,500 Bitcoin reported in the previous quarter.
With Bitcoin’s current price at $72,000, the company’s Bitcoin account is worth more than $18 billion. This aggressive accumulation strategy underscores the company’s unwavering commitment to Bitcoin, positioning it as a key player in corporate cryptocurrency investment.
