01—Abstract
Summary
Summary of the 8-K filed December 16, 2024. Cited figures are marked; the original filing is the authoritative source.
MicroStrategy Incorporated (now Strategy Inc) disclosed in this Form 8-K, filed December 16, 2024, two updates covering the period from December 9 to December 15, 2024.
Under its Sales Agreement dated October 30, 2024, which provides for at-the-market sales of up to $21 billiona of class A common stock, the company sold 3,884,712 shares for aggregate net proceeds of approximately $1.54 billion. About $7.65 billion of capacity remained available as of December 15, 2024. The company used those proceeds to acquire approximately 15,350 bitcoins for about $1.5 billion in cash, at an average price of approximately $100,386 per bitcoin, inclusive of fees and expenses.
As of December 15, 2024, it held approximately 439,000 bitcoins, acquired at an aggregate purchase price of approximately $27.1 billionb, or an average of approximately $61,725 per bitcoin. The filing also furnishes under Item 7.01 a new key performance indicator, BTC Yield, which the company reports at 46.4% quarter-to-date (from October 1, 2024) and 72.4% year-to-date (from January 1, 2024).
The filing states that BTC Yield is not a traditional yield or return measure, is not predictive of the share price, and does not account for debt or other senior claims. The company also notes that its convertible notes and bitcoin purchase sources affect the metric.
02—Key points
Key Highlights
- Sold 3,884,712 class A shares under the at-the-market program from December 9 to December 15, 2024, for net proceeds of approximately $1.54 billion.
- Approximately $7.65 billion of the $21 billion Sales Agreement capacity remained available as of December 15, 2024.
- Acquired approximately 15,350 bitcoins for about $1.5 billion in cash at an average price of approximately $100,386 per bitcoin, funded by share sale proceeds.
- Total bitcoin holdings reached approximately 439,000, acquired at an aggregate purchase price of approximately $27.1 billion, an average of approximately $61,725 per bitcoin.
- Reported BTC Yield of 46.4% quarter-to-date and 72.4% year-to-date through December 15, 2024, based on the company's bitcoin holdings relative to assumed diluted shares outstanding.
- Assumed diluted shares outstanding were 279,510 thousand as of December 15, 2024, up from 235,042 thousand as of September 30, 2024, and 207,636 thousand as of December 31, 2023.
- The company states that BTC Yield is a narrow, supplemental KPI that is not an operating, liquidity, or return-on-investment measure and is not predictive of the share price.
03—Questions
Frequently Asked Questions
How is the company funding its bitcoin purchases?
According to the filing, the bitcoin purchases during December 9 to December 15, 2024 were made using proceeds from the issuance and sale of class A common stock under the Sales Agreement with a group of sales agents. The filing also notes that past bitcoin purchases were funded in part by senior secured notes (since redeemed) and convertible senior notes.
How much capacity remains under the at-the-market equity program?
As of December 15, 2024, approximately $7.65 billion of class A common stock remained available for issuance and sale under the Sales Agreement, which originally provided for up to $21 billion in aggregate offering price.
What is BTC Yield and how should investors interpret it?
BTC Yield is the company's KPI measuring the period-to-period percentage change in the ratio of its bitcoin holdings to assumed diluted shares outstanding. The filing says it is not a traditional financial yield, does not reflect debt or senior claims, may overstate or understate the accretive effect of equity issuance, and is not indicative of the stock price. Investors should rely on the financial statements in SEC filings.
What is the company's average cost basis for its bitcoin holdings?
As of December 15, 2024, the company held approximately 439,000 bitcoins acquired at an aggregate purchase price of approximately $27.1 billion, or an average purchase price of approximately $61,725 per bitcoin, inclusive of fees and expenses.
Does the company pay dividends, and does owning its stock give ownership of its bitcoin?
The filing states that the company has historically not paid dividends on its common stock and makes no suggestion that it will do so in the future. It also states that ownership of common stock does not represent an ownership interest in the bitcoin the company holds.
04—Continue