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Highlights
- MicroStrategy shareholders just diluted the company's shares
- MSTR once capped at 330 million will now have a supply of 10.3 billion
- This dilution was voted for to aid the Bitcoin acquisition strategy
Shareholders of American business intelligence and software firm, MicroStrategy Incorporated have voted to increase the firm’s shares supply to bet more on Bitcoin (BTC). The dilution move will now increase the firm’s MSTR supply from its current 330 million to 10.3 billion. This dilution impacts the authorized Class A common and preferred stock, respectively.
MicroStrategy Bitcoin Purchase Agenda Continues
The MicroStrategy shareholders approved two proposals to see it function more effectively as a major Bitcoin investor. Increasing the Class A common stock will give the company more reserve base to power its debt offering in its bid to buy more Bitcoin.
As reported by Bloomberg, noting recordings from the shareholders’ meeting, the approval received 55.8% of the eligible votes. It remains uncertain how much impact this massive dilution will have on its share price. As of writing, each MSTR stock was changing hands for $396.82, up 0.08% in intraday trading.
MicroStrategy announced it acquired 11,000 BTC for $1.1 billion earlier today, bringing its total stash to 461,000 BTC units. For more than 7 weeks consecutive weeks, the company has made BTC acquisitions despite existing market volatility. It considered the share supply increment a way to ensure the long-term sustainability of its Bitcoin acquisition agenda.
The Unwavering Bitcoin Focus
Despite being registered as a software firm, MicroStrategy is now known as a BTC investor and development firm. When it started buying Bitcoin in August 2020, it started with its excess reserve.
As it saw the potential in its BTC bets, it pivoted into issuing Convertible Senior Notes to fund the purchases. By borrowing against its stock, the need for dilution came up, otherwise, it might face an intense short squeeze on its Bitcoin debts.
As reported earlier by Coingape, the odds of approval of the share dilution were high, considering Chairman Michael Saylor holds a 47% stake in the company. While wielding this influence has paid off, market experts remain eager to see if the bet will turn out a positive one in the long run.
Support for Strategic Bitcoin Reserve in the US
As the largest corporate holder of Bitcoin, holding over 2% of the coin’s circulating supply, many are now adopting the MicroStrategy Bitcoin playbook.
Michael Saylor is a major advocate of strategic Bitcoin reserves in the US. He has advised the US Government to ditch gold to buy BTC, a move he believes can help solve the country’s debt crisis.
While other market analysts like Peter Schiff are against the entire MicroStrategy-Bitcoin ideology, Saylor remains convinced of its viability.
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