MicroStrategy's $2.1 billion new stock plan surpasses Tesla, 21 is the magical number in the world of Bitcoin.

The Bitcoin development company MicroStrategy plans to sell a record $2.1 billion in new stocks to increase its Bitcoin inventory, marking the largest transaction amount to date, far surpassing Tesla's $10 billion in 2020. MicroStrategy CEO Phong Le also explained the uniqueness and importance of 21 in the Bitcoin world.

MicroStrategy's software business is still losing money, and it plans to raise an additional $420 million in the next three years to further increase its Bitcoin holdings.

MicroStrategy's New Equity Plan Exceeds Tesla's Amount

According to Bloomberg report, MicroStrategy's current equity fundraising through At-the-market offering far surpasses the amount Tesla, led by Elon Musk, raised four years ago.

Note: At-the-market offering is a method of issuing stocks publicly, typically used by public companies to gradually raise funds. The company will sell newly issued stocks or existing stocks through designated brokers at the prevailing market price. These stocks will be sold on the secondary market, and the brokers will deliver the cash proceeds to the issuing company, which can be used for various purposes such as general operating expenses, research and development costs, debt repayment, etc.

MicroStrategy has raised over $3.5 billion through various fundraising activities this year, with the scale of this equity plan being particularly noteworthy. The $21 billion is the largest of the four largest transactions globally to date.

Bloomberg data shows that Tesla raised $10 billion through two separate transactions in just over three months in 2020, while healthcare REIT Welltower Inc. raised over $11 billion through a multi-year plan. This method of selling stocks through so-called "market price offerings" At-the-market offering will involve hiring brokerage firms and applying to the U.S. Securities and Exchange Commission (SEC) for a total amount, and then raising funds from the market as needed.

For MicroStrategy, selling stocks and convertible bonds to purchase Bitcoin is crucial to its business. According to its latest financial report, MicroStrategy has purchased Bitcoin through $4.3 billion in convertible bonds and $4.3 billion in new stocks, resulting in a total Bitcoin holding of 252,220 as of October 29, with an average cost of $39,266 per Bitcoin.

Why $21 Billion?

MicroStrategy announced the "21/21 Plan," aiming to increase capital by $42 billion over the next three years, including $21 billion in equity and $21 billion in fixed-income securities, further supporting its Bitcoin acquisition as part of its treasury reserve strategy.

MicroStrategy CEO Phong Le stated that part of the reason for this number is related to the science fiction novel "The Hitchhiker's Guide to the Galaxy," in which a supercomputer calculates the answer to life, the universe, and everything as the number 42. During the earnings call, he said:

We believe this is a unique number with some special features. It is the sum of 21 plus 21. We all know that 21 is a magical number in the Bitcoin world, where the maximum number of circulating Bitcoins can only be 21 million.

MicroStrategy's recent move has also sparked market discussions, with Peter Schiff, known as the gold bull, mocking the company with an "eggman" joke, claiming that MicroStrategy isn't making money and that Bitcoin is just an old scam in new packaging.

Goldman vs. Bitcoiners, will Michael Saylor engage in this new human battle?