MicroStrategy® Incorporated (Nasdaq: MSTR) (the “Company”), the
largest corporate holder of bitcoin and the world’s first Bitcoin
Treasury Company, today announced updates with respect to its
bitcoin activity and holdings, capital markets activity, and BTC
Yield, a key performance indicator.
BTC Update
The Company today announced that, during the period between
October 31, 2024 and November 10, 2024, the Company acquired
approximately 27,200 bitcoins for approximately $2.03 billion in
cash, at an average price of approximately $74,463 per bitcoin,
inclusive of fees and expenses. The bitcoin purchases were made
using proceeds from the issuance and sale of Shares (defined below)
under the Sales Agreements (defined below).
As of November 10, 2024, the Company, together with its
subsidiaries, held an aggregate of approximately 279,420 bitcoins,
which were acquired at an aggregate purchase price of approximately
$11.9 billion and an average purchase price of approximately
$42,692 per bitcoin, inclusive of fees and expenses.
ATM Update
As previously disclosed, on August 1, 2024, the Company entered
into a Sales Agreement (the “August Sales Agreement”) with TD
Securities (USA) LLC, The Benchmark Company, LLC, BTIG, LLC,
Canaccord Genuity LLC, Maxim Group LLC and SG Americas Securities,
LLC, as sales agents (the “August Sales Agents”), pursuant to which
the Company may issue and sell shares of its class A common stock,
par value $0.001 per share (“Shares”), having an aggregate offering
price of up to $2.0 billion from time to time through the Sales
Agents.
Additionally, on October 30, 2024, the Company entered into a
Sales Agreement (the “October Sales Agreement” and, together with
the August Sales Agreement, the “Sales Agreements”) with TD
Securities (USA) LLC, Barclays Capital Inc., The Benchmark Company,
LLC, BTIG, LLC, Canaccord Genuity LLC, Cantor Fitzgerald & Co.,
Maxim Group LLC, Mizuho Securities USA LLC, and SG Americas
Securities, LLC, as agents (the “October Sales Agents”), pursuant
to which the Company may issue and sell Shares having an aggregate
offering price of up to $21 billion from time to time through the
October Sales Agents.
The Company today announced that, as of November 10, 2024, the
Company had sold an aggregate of 7,854,647 Shares under the Sales
Agreements for aggregate net proceeds to the Company (less sales
commissions) of approximately $2.03 billion. As a result of these
sales, the August Sales Agreement has been substantially depleted
and further at-the-market sales of Shares will be made under the
October Sales Agreement.
BTC Yield KPI
From October 1, 2024 to November 10, 2024, the Company’s BTC
Yield was 7.3%. From January 1, 2024 to November 10, 2024, the
Company’s BTC Yield was 26.4%.
BTC Yield is a key performance indicator (“KPI”) that represents
the percentage change period-to-period of the ratio between the
Company’s bitcoin holdings and its Assumed Diluted Shares
Outstanding. Assumed Diluted Shares Outstanding refers to the
aggregate of the Company’s actual shares of common stock
outstanding as of the end of the applicable period plus all
additional shares that would result from the assumed conversion of
all outstanding convertible notes, exercise of all outstanding
stock option awards, and settlement of all outstanding restricted
stock units and performance stock units. The Company uses BTC Yield
as a KPI to help assess the performance of its strategy of
acquiring bitcoin in a manner the Company believes is accretive to
shareholders. The Company believes this KPI can be used to
supplement an investor’s understanding of the Company’s decision to
fund the purchase of bitcoin by issuing additional shares of its
common stock or instruments convertible to common stock.
BTC Yield and Basic and Assumed Diluted Shares Outstanding
12/31/2023
9/30/2024
11/10/2024
Total Bitcoin Holdings
189,150
252,220
279,420
Shares Outstanding (in ‘000s)
(1)
Class A
149,041
182,995
191,154
Class B
19,640
19,640
19,640
Basic Shares Outstanding (2)
168,681
202,635
210,794
2025 Convertible Shares @$39.80
16,330
-
-
2027 Convertible Shares @$143.25
7,330
7,330
7,330
2028 Convertible Shares @$183.19
-
5,513
5,513
2030 Convertible Shares @$149.77
-
5,342
5,342
2031 Convertible Shares @$232.72
-
2,594
2,594
2032 Convertible Shares @$204.33
-
3,915
3,915
Options Outstanding
12,936
5,678
5,256
RSU/PSU Unvested
2,359
2,034
2,013
Assumed Diluted Shares Outstanding
(3)
207,636
235,042
242,758
BTC Yield % (Quarter to Date)
7.3%
BTC Yield % (Year to Date)
26.4%
(1)
On July 11, 2024, the Company announced a
10-for-1 stock split of the Company’s class A common stock and
class B common stock. The stock split was effected by means of a
stock dividend to the holders of record of the Company’s class A
common stock and class B common stock as of the close of business
on August 1, 2024, the record date for the dividend. The dividend
was distributed after the close of trading on August 7, 2024 and
trading commenced on a split-adjusted basis at market open on
August 8, 2024. As a result of the stock split, all applicable
share and equity award information has been retroactively adjusted
to reflect the stock split for all periods presented.
(2)
Basic Shares Outstanding as of 12/31/2023
and 9/30/2024 reflects the actual Class A and Class B common stock
outstanding as of the dates presented. Basic Shares
Outstanding as of 11/10/2024 reflects the sum of (i) the actual
Class A and Class B common stock outstanding as of the date
presented and (ii) shares of Class A common stock sold under
at-the-market equity offering programs and/or exercised pursuant to
stock options as of the date presented and pending issuance upon
settlement.
(3)
Assumed Diluted Shares Outstanding refers
to the aggregate of our Basic Shares outstanding as of the end of
each period plus all additional shares that would result from the
assumed conversion of all outstanding convertible notes, exercise
of all outstanding stock option awards, and settlement of all
outstanding restricted stock units and performance stock
units. Assumed Diluted Shares Outstanding is not calculated
using the treasury method and does not take into account any
vesting conditions (in the case of equity awards), the exercise
price of any stock option awards or any contractual conditions
limiting convertibility of convertible debt instruments.
Important Information about BTC Yield KPI
BTC Yield is a KPI that represents the percentage change
period-to-period of the ratio between the Company’s bitcoin
holdings and its Assumed Diluted Shares Outstanding. Assumed
Diluted Shares Outstanding refers to the aggregate of the Company’s
actual shares of common stock outstanding as of the end of each
period plus all additional shares that would result from the
assumed conversion of all outstanding convertible notes, exercise
of all outstanding stock option awards, and settlement of all
outstanding restricted stock units and performance stock units.
Assumed Diluted Shares Outstanding is not calculated using the
treasury method and does not take into account any vesting
conditions (in the case of equity awards), the exercise price of
any stock option awards or any contractual conditions limiting
convertibility of convertible debt instruments.
The Company uses BTC Yield as a KPI to help assess the
performance of its strategy of acquiring bitcoin in a manner the
Company believes is accretive to shareholders. The Company believes
this KPI can be used to supplement an investor’s understanding of
its decision to fund the purchase of bitcoin by issuing additional
shares of its common stock or instruments convertible to common
stock. When the Company uses this KPI, management also takes into
account the various limitations of this metric, including that it
does not take into account debt and other liabilities and claims on
company assets that would be senior to common equity and that it
assumes that all indebtedness will be refinanced or, in the case of
the Company’s senior convertible debt instruments, converted into
shares of common stock in accordance with their respective
terms.
Additionally, this KPI is not, and should not be understood as,
an operating performance measure or a financial or liquidity
measure. In particular, BTC Yield is not equivalent to “yield” in
the traditional financial context. It is not a measure of the
return on investment the Company’s shareholders may have achieved
historically or can achieve in the future by purchasing stock of
the Company, or a measure of income generated by the Company’s
operations or its bitcoin holdings, return on investment on its
bitcoin holdings, or any other similar financial measure of the
performance of its business or assets.
The trading price of the Company’s class A common stock is
informed by numerous factors in addition to the amount of bitcoins
the Company holds and number of actual or potential shares of its
stock outstanding, and as a result, the market value of the
Company’s shares may trade at a discount or a premium relative to
the market value of the bitcoin the Company holds, and BTC Yield is
not indicative nor predictive of the trading price of the Company’s
shares of class A common stock.
As noted above, this KPI is narrow in its purpose and is used by
management to assist it in assessing whether the Company is using
equity capital in a manner accretive to shareholders solely as it
pertains to its bitcoin holdings.
In calculating this KPI, the Company does not take into account
the source of capital used for the acquisition of its bitcoin. The
Company notes in particular, it has acquired bitcoin using proceeds
from the offerings of its 6.125% Senior Secured Notes due 2028
Secured Notes (which the Company has since redeemed), which were
not convertible to shares of the Company’s common stock, as well as
convertible senior notes, which at the time of issuance had, and
may from time-to-time thereafter have, conversion prices above the
current trading prices of the Company’s common stock, or as to
which the holders of such convertible notes may not then be
entitled to exercise the conversion rights of the notes. Such
offerings have had the effect of increasing the BTC Yield without
taking into account the corresponding debt. Conversely, if any of
the Company’s convertible senior notes mature or are redeemed
without being converted into common stock, the Company may be
required to sell shares in quantities greater than the shares such
notes are convertible into or generate cash proceeds from the sale
of bitcoin, either of which would have the effect of decreasing the
BTC Yield due to changes in the Company’s bitcoin holdings and
shares in ways that were not contemplated by the assumptions in
calculating BTC Yield. Accordingly, this metric might overstate or
understate the accretive nature of the Company’s use of equity
capital to buy bitcoin because not all bitcoin may be acquired
using proceeds of equity offerings and not all issuances of equity
may involve the acquisition of bitcoin.
The Company determines its KPI targets based on its history and
future goals. The Company’s ability to achieve positive BTC Yield
may depend on a variety of factors, including its ability to
generate cash from operations in excess of its fixed charges and
other expenses, as well as factors outside of its control, such as
the availability of debt and equity financing on favorable terms.
Past performance is not indicative of future results.
The Company has historically not paid any dividends on its
shares of common stock, and by presenting this KPI the Company
makes no suggestion that it intends to do so in the future.
Ownership of common stock does not represent an ownership interest
in the bitcoin the Company holds.
Investors should rely on the financial statements and other
disclosures contained in the Company’s SEC filings. This KPI is
merely a supplement, not a substitute. It should be used only by
sophisticated investors who understand its limited purpose and many
limitations.
About MicroStrategy Incorporated
MicroStrategy (Nasdaq: MSTR) is the world's first and largest
Bitcoin Treasury Company. We are a publicly traded company that has
adopted Bitcoin as our primary treasury reserve asset. By using
proceeds from equity and debt financings, as well as cash flows
from our operations, we strategically accumulate Bitcoin and
advocate for its role as digital capital. Our treasury strategy is
designed to provide investors varying degrees of economic exposure
to Bitcoin by offering a range of securities, including equity and
fixed-income instruments. In addition, we provide industry-leading
AI-powered enterprise analytics software, advancing our vision of
Intelligence Everywhere. We leverage our development capabilities
to explore innovation in Bitcoin applications, integrating
analytics expertise with our commitment to digital asset growth. We
believe our combination of operational excellence, strategic
Bitcoin reserve, and focus on technological innovation positions us
as a leader in both the digital asset and enterprise analytics
sectors, offering a unique opportunity for long-term value
creation.
MicroStrategy, MicroStrategy AI, Intelligence Everywhere,
Intelligent Enterprise, and MicroStrategy Library are either
trademarks or registered trademarks of MicroStrategy Incorporated
in the United States and certain other countries. Other product and
company names mentioned herein may be the trademarks of their
respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20241111351255/en/
MicroStrategy Incorporated Shirish Jajodia Corporate Treasurer
ir@microstrategy.com
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