James Richardson
MicroStrategy, a business intelligence firm known for its aggressive bitcoin strategy, has introduced the “21/21 Plan,” a bold initiative aimed at expanding its bitcoin holdings. The company plans to raise $42 billion over the next three years, funded equally by equity and fixed-income issuances, to acquire additional bitcoin.
Since 2020, MicroStrategy (MSTR) has acquired over 252,000 bitcoins, and this new plan marks a significant increase in its bitcoin acquisition approach. Year-to-date, the company’s stock has surged by around 290%, far exceeding bitcoin’s approximate 64% rise for the same period.
In its latest earnings report, MicroStrategy disclosed quarterly revenue of $116 million, slightly below the $122.66 million forecast. Despite this, the company posted a year-to-date BTC Yield of 17.8%, a measure it uses to gauge the performance of its bitcoin-focused strategy.
With the 21/21 Plan in place, management has raised its BTC Yield target, now projecting an annual yield between 6-10%. By 2025, the company aims to hold 412,220 bitcoins, anticipating a bitcoin price of $175,000.
Two Prime Digital Assets CEO Alexander Blume described BTC Yield as “a language-laundering of real yield,” suggesting the term is intended to bridge the gap between BTC net asset value and MicroStrategy’s $50 billion market cap. He added, “It’s a smart tactic that recasts a challenging position (BTC being lower than stock value) into a positive.”
Benchmark analyst Mark Palmer attributes MicroStrategy’s stock valuation—currently 2.7 times its net asset value—to its unique approach, combining bitcoin exposure with traditional financial mechanisms. He noted that rising institutional interest in bitcoin, combined with an evolving regulatory landscape, could boost MicroStrategy’s stock further. Many investors see bitcoin as a hedge against monetary debasement, a concern Palmer believes has supported bitcoin’s recent price strength.
Palmer also emphasized that MicroStrategy’s compounding yield from leveraging U.S. capital markets sets it apart from other bitcoin investment options, like spot bitcoin ETFs. According to Palmer, MicroStrategy’s management has carefully planned the $42 billion target and the 50/50 split between equity and debt, based on a comprehensive capital model.
Blume noted that while the structure is designed to appeal to a wide range of investors by offering low-interest debt and a convertible premium, it carries risks if bitcoin prices experience a prolonged downturn. “If BTC drops and stays low, the company could find itself in deep financial trouble,” he warned.
Palmer raised his target for MSTR stock from $245 to $300, maintaining a “buy” rating, while shares hovered around $245. Bitcoin was priced around $70,370 at the time, reflecting a 2% decrease over the past 24 hours.
