MicroStrategy (NASDAQ:MSTR), the world’s largest bitcoin holding company, is tapping banks to help it raise $42 billion by selling new shares and fixed-income securities to buy more bitcoin. The move follows a series of deals the company has made over the past year.

The company, founded by Michael Saylor, has hired banks to conduct a share sale through a mechanism known as a direct market offering that could raise $21 billion. In addition, the company plans to sell fixed-income securities that could add roughly the same amount to its coffers.

MicroStrategy has raised billions of dollars over the past year by selling convertible bonds and also selling shares that its banks can sell on the market to increase their stock of cryptocurrencies.

Aspirations and Challenges

The program would allow MicroStrategy, whose corporate strategy includes buying bitcoin, to sell up to $21 billion worth of shares without having to file additional paperwork. But that doesn’t guarantee the company will do it, or that it will make the money all at once.

Many companies have offered similar facilities but have not taken full advantage of them, as they may only sell a portion of the available shares.

In the third quarter, MicroStrategy said it raised $2.1 billion through the sale of stocks and bonds, after raising $800 million in the three months ended June 30.

Impact of advertising on stock performance

The company’s shares were under pressure in trading after it announced and released its quarterly financial results. The company’s stock has risen by about 500% over the past year, compared to Bitcoin’s rise of about 110% in the same period.

“We see $42 billion as an ambitious target but not an impossible one,” said Sean McNulty, head of trading at Arbelus Markets. “Ultimately, if the price of Bitcoin goes up, it will be to their advantage.”

The $21 billion IPO raised through the direct market offering is larger than any other recent offering by the company, and far exceeds GameStop's (NYSE:GME) $3.5 billion offering.

Direct offering programs allow investment banks to create shares and sell them at market prices, with the proceeds added to the company's balance sheet, helping to improve its financial capacity and investment strategies.

MicroStrategy shares fell 4.23% to $247 per share at the close of trading yesterday. The stock is up 50% month-over-month and up 291% year-to-date.