01—Abstract
Summary
Summary of the 8-K filed November 12, 2024. Cited figures are marked; the original filing is the authoritative source.
On November 11, 2024, MicroStrategy Incorporated disclosed that between October 31 and November 10, 2024, it acquired approximately 27,200 bitcoins for approximately $2.03 billiona in cash, at an average price of approximately $74,463 per bitcoin, inclusive of fees and expenses.
The purchases were funded with proceeds from sales of its class A common stock under its at-the-market (ATM) sales agreements. As of November 10, 2024, the company held approximately 279,420 bitcoins, acquired at an aggregate purchase price of approximately $11.9 billionb and an average purchase price of approximately $42,692 per bitcoin. Through November 10, 2024, the company had sold an aggregate of 7,854,647 shares under the sales agreements for net proceeds of approximately $2.03 billion.
The August 2024 sales agreement, with a $2.0 billionc capacity, has been substantially depleted, and further ATM sales will be made under the October 30, 2024 agreement, which has an aggregate offering price of up to $21 billion. The company reported a BTC Yield KPI of 7.3% for October 1 to November 10, 2024 and 26.4% year to date, though the filing notes this metric is not a measure of financial performance and is not predictive of share price. The filing also states that, due to the volume of share sales, Michael J.
Saylor and his affiliates are expected to fall below 50%d of the aggregate voting power on or shortly after November 12, 2024. As a result, the company will no longer qualify as a "controlled company" under Nasdaq rules.
The board will establish a Nominating Committee with Carl J. Rickertsen as its sole member, and the company will be subject to phase-in periods to meet Nasdaq independence requirements.
02—Key points
Key Highlights
- Acquired approximately 27,200 bitcoins for approximately $2.03 billion in cash between October 31 and November 10, 2024, at an average price of approximately $74,463 per bitcoin.
- Total holdings reached approximately 279,420 bitcoins, acquired at an aggregate purchase price of approximately $11.9 billion (average approximately $42,692 per bitcoin).
- Sold 7,854,647 Class A shares under the sales agreements for net proceeds of approximately $2.03 billion as of November 10, 2024, which funded the bitcoin purchases.
- The August 2024 $2.0 billion ATM sales agreement is substantially depleted; further sales will occur under the October 30, 2024 agreement with up to $21 billion in aggregate offering price.
- Reported BTC Yield KPI of 7.3% for October 1 to November 10, 2024 and 26.4% from January 1 to November 10, 2024; the company states this KPI is not a measure of financial performance or a predictor of share price.
- Michael J. Saylor and affiliates are expected to fall below 50% of voting power on or shortly after November 12, 2024, ending the company's Nasdaq "controlled company" status.
- Carl J. Rickertsen, an independent director, will be the sole member of a newly established Nominating Committee of the Board.
03—Questions
Frequently Asked Questions
How much bitcoin did the company buy recently, and what did it pay?
Between October 31 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.
How are the bitcoin purchases being funded?
The purchases were made using proceeds from the issuance and sale of class A common stock under the company's Sales Agreements with various sales agents. As of November 10, 2024, the company had sold 7,854,647 shares for net proceeds of approximately $2.03 billion, less sales commissions.
Why is the company losing its controlled company status, and what changes?
Due to the volume of share sales under the Sales Agreements, Michael J. Saylor and his affiliates are expected to hold less than 50% of the aggregate voting power on or shortly after November 12, 2024. The company will then no longer qualify for Nasdaq's controlled company exemption, so it must phase in a majority of independent directors, a fully independent compensation committee, and an independent nominations process. The board currently has a majority of independent directors and a fully independent compensation committee, and it is establishing a Nominating Committee.
What is the BTC Yield, and how should investors interpret it?
BTC Yield is a KPI measuring the period-to-period percentage change in the ratio of bitcoin holdings to Assumed Diluted Shares Outstanding. The company reported 7.3% for October 1 to November 10, 2024 and 26.4% year to date. The company states it is not an operating, financial, liquidity, or return measure, does not account for debt, and is not predictive of the share price.
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