<a href="https://www.world-today-news.com/full-of-uncertainty-bitcoin-even-predicted-soon-us-20-thousand-blockchain-media-indonesia/" title="Full of Uncertainty, Bitcoin Even Predicted Soon US $ 20 Thousand – Blockchain Media Indonesia”>MicroStrategy remains true to its unusual corporate strategy: instead of relying exclusively on its core business in the area of business intelligence, the company uses a large part of its financial strength to invest in Bitcoin. This Bitcoin strategy – largely shaped by co-founder and BTC advocate Michael Saylor – has been in focus since 2020 and has made the company one of the largest Bitcoin holders in the world.
MicroStrategy is making significant losses
In the third quarter, MicroStrategy reported an adjusted loss per share of -$1.56, missing average analyst estimates of -$0.02. Sales came in at $116.1 million, below expectations of $121.5 million. In particular, the high write-offs on Bitcoin, which amounted to $412.1 million, and operating expenses, which rose by over 300% compared to the previous year, put a strain on the result.
The “21/21” capital raising program and other BTC purchases
Despite these challenges, MicroStrategy has announced a massive financing program: With the new “21/21 plan,” the company plans to generate $42 billion over the next three years, divided into $21 billion in equity and $21 billion in fixed income securities . These funds should flow into further purchases of Bitcoin in order to further expand the existing BTC position. Already in the third quarter, the holdings increased by 11%, and the company now holds 252,220 BTC, worth approximately $6.85 billion.
MicroStrategy into the question of sustainability
As MicroStrategy continues to raise debt and issue new shares, it is under increasing pressure to maintain its financial strength. The annual interest costs, which are currently around $50 million, are putting an additional burden on the balance sheet. Although the company benefits from low-interest convertible bonds, analysts warn of the sharp increase in dilution and the possibility of reaching its financing limits.
MicroStrategy share chart
Outlook and assessment
MicroStrategy shares have seen a gain of over 483% in the last twelve months, but analysts see the current valuation as a significant premium compared to buying Bitcoin outright. Investors who want to bet on the Bitcoin rally might therefore consider buying BTC directly. Given the high-risk strategy and increased debt, the stock remains a speculative investment – further development depends largely on BTC performance and the company’s ability to cover its interest costs.
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