As President-elect Donald Trump unveiled his own meme coin, TRUMP alongside his wife, Melania Trump, who launched her own meme coin, MELANIA, the crypto world is witnessing a surge in investor interest. Amid this growing crypto frenzy, Michael Saylor, Founder and CEO of MicroStrategy (MSTR), has hinted at buying more Bitcoin (BTC-USD). MicroStrategy, a data analytics company, has been accumulating Bitcoin since 2020 and has reportedly accumulated 450,000 Bitcoins. Over the past year, Bitcoin’s price has surged by more than 100%, fueling further optimism among investors.
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Saylor’s Bold Statement on Bitcoin
In a post on the social media platform, X, Saylor stated, “Things will be different tomorrow,” accompanied by a graph from the company’s portfolio tracker. According to Bitcoin.com, as of January 19, the company’s BTC holdings are valued at $47.234 billion.
MSTR Shareholders Will Vote on Increased Shares
Meanwhile, on January 21, MSTR shareholders will vote on a proposal to increase the company’s authorized Class A common shares from 330 million to 10.3 billion. This move aims to raise $2 billion through a preferred stock offering to fund its aggressive Bitcoin acquisition strategy. According to Bloomberg, many analysts expect the proposal to pass easily with co-founder and chairman Michael Saylor holding 47% of the voting power.
What Are the Implications of MSTR’s Increase in Authorized Shares?
The increase in the company’s authorized shares would grant MicroStrategy the ability to have more shares outstanding than major Nasdaq 100 giants like Nvidia (NVDA), Apple (AAPL), Alphabet (GOOGL), and Amazon (AMZN), according to Bloomberg. Last year, the company announced plans to raise $42 billion over three years through share issuances and debt sales to buy Bitcoin. Since then, MicroStrategy has doubled its Bitcoin holdings to over $44 billion through consistent purchases.
Usually, investors are against such a rise in the potential number of shares as it could dilute earnings per share, equity, and voting rights. In fact, the Bloomberg report cited Portfolio manager Michael Lebowitz, “No company has ever done anything of this magnitude.”
However, MicroStrategy currently has limited alternatives. The company’s software business remains unprofitable, and it has only $6.5 billion in equity offerings left under its $42 billion plan. The share increase could be necessary for the company to sustain its Bitcoin-focused strategy despite investor concerns.
Is MSTR Stock a Good Buy?
Analysts remain bullish about MSTR stock, with a Strong Buy consensus rating based on a unanimous eight Buys. Over the past year, MSTR has skyrocketed by more than 500%, and the average MSTR price target of $529.57 implies an upside potential of 33.6% from current levels.
