MicroStrategy's "21/21 Plan" Sparks Debate Among Shareholders

MicroStrategy, known for its aggressive Bitcoin accumulation, has proposed an ambitious "21/21 Plan" to raise a massive $42 billion through equity and debt financing. This move, aimed at further increasing the company's Bitcoin holdings, has ignited a heated debate among shareholders.

The "21/21 Plan" in Detail

The plan involves:

• Equity Increase: Increasing the number of Class A shares from 330 million to a staggering 10.33 billion.
• Preferred Stock Authorization: Raising preferred stock authorization from 5 million to 1.005 billion.
• Equity Incentive Plan Update: Granting automatic equity awards to new board members, aligning their interests with the company's Bitcoin-focused strategy.

These measures are intended to provide ample funding for continued Bitcoin acquisitions. Since mid-2020, MicroStrategy has amassed 444,262 BTC, currently valued at approximately $42 billion, making it one of the largest corporate Bitcoin holders globally.

Shareholder Reactions:

The proposal has met with mixed reactions. Some argue that the "21/21 Plan" will allow for gradual share issuance over the next 10-15 years, providing a long-term timeframe for Bitcoin purchases.

However, critics express concerns about potential shareholder dilution. They argue that the company should prioritize shareholder benefits, such as stock splits, before seeking further capital infusions. Furthermore, the plan raises concerns about the potential for significant liquidation risks in the future.

December 2024, Cryptoniteuae