MicroStrategy will hold a special shareholder meeting next year to vote on key proposals that aim to advance its 21/21 plan for Bitcoin acquisitions. Shareholders will decide whether to let the company increase its authorized common and preferred stock, as well as adjust its equity incentive plan to boost its Bitcoin strategy.
The company is putting forward new proposals designed to support MicroStrategy’s ambitious goal of raising $42 billion for Bitcoin investments. It already has loads of BTC – but wants even more!
As detailed in a new SEC filing, MicroStrategy seeks to raise the number of authorized Class A shares from 330 million to 10.33 billion and increase the authorized preferred shares from 5 million to 1.005 billion.
More BTC!
These two proposals are aimed at providing the company with more flexibility in issuing new shares for various purposes, such as raising capital, acquisitions, or stock options. The move specifically targets advancing the company’s 21/21 plan—accumulating $42 billion in Bitcoin through equity offerings and fixed-income securities.
MicroStrategy first revealed the plan in its third-quarter earnings reports in late October. The company has since logged 192,042 BTC, valued at around $18 billion at current market prices. This equates to around 42% of its goal.
The company just bought another $561 million worth of Bitcoin last week, extending its buying streak to seven straight weeks. The latest purchase was made at a record average price of $106,000.
MicroStrategy’s proposals come after the company officially joined the Nasdaq-100 index on Monday. The debut positioned it at the 52nd spot, accounting for approximately 0.42% of the index’s total market capitalization.
This matched Bloomberg ETF analysts’ estimates. Eric Balchunas and James Seyffart, the prominent Bloomberg ETF experts, forecast that inclusion in the index could unlock around $2.1 billion in buying activity from ETFs that track the Nasdaq-100.
Despite initial optimism, MicroStrategy (MSTR) shares fell 8.78% to close Monday at 332.23. However, the drop was not totally unexpected. Markets are cooling off into the new year.
Analysts noted that the increase in demand and valuation due to index inclusion is often priced in before the actual trading by index funds occurs. This means the stock price often jumps upon announcement, not necessarily on the inclusion date itself.
The actual trading by index funds is often absorbed by the market with minimal additional impact. Year-to-date, MSTR stock has soared 426%, still outperforming most S&P 500 and Nasdaq indices.
MSTR shares are closely tied to Bitcoin’s price, therefore, it’s crucial to reflect on Bitcoin’s recent performance. Bitcoin experienced a sharp drop to $92,400 yesterday, marking an 11.8% decline over the past week. While it has slightly rebounded to $94,000 today, the overall trend remains downward.
Apart from that, the global financial markets are recovering after enduring severe losses following Fed’s hawkish messages last Thursday. The overall sentiment also likely influenced MSTR shares.
MicroStrategy Seeks to Amend Equity Incentive Plan
In addition to the two enhancing stock issuance, MicroStrategy also seeks stockholders approval to modify its equity incentive plan. If approved, the amendment will automatically grant newly appointed non-employee directors equity awards valued at $2 million upon their initial appointment to the Board.
According to the filing, the amount will be divided equally between non-statutory stock options and restricted stock units, with each award vesting annually over four years. This proposal is part of the company’s strategy to recruit and keep talented directors as it maintains its emphasis on acquiring Bitcoin.
In other words, the proposed amendment will allow for automatic equity awards for newly appointed directors, including Brian Brooks, Jane Dietze, and Gregg Winiarski.
Brooks is a prominent figure in the cryptocurrency industry, previously serving as former Binance.US and Coinbase legal executive, while Dietze also held leadership roles at numerous firms like Galaxy Digital and Goldman Sachs.
