MicroStrategy’s Bitcoin Acquisition Plan: $1.1 Billion in BTC Acquisitions and More to Come
MicroStrategy, the business intelligence firm and significant corporate holder of Bitcoin, has further bolstered its holdings with an additional 10,107 BTC for approximately $1.1 billion. According to an 8-K filing with the Securities and Exchange Commission (SEC), the acquisitions were made between January 21 and January 26, with an average purchase price of $105,596 per BTC. The company’s total Bitcoin holdings now stand at 471,107 BTC, valued at over $46 billion.
Company’s Bitcoin Investment Strategy
MicroStrategy’s Bitcoin investments were made at an average price of $64,511 per BTC, for a total expenditure of about $30.4 billion including all fees and expenses, as disclosed by co-founder and executive chairman Michael Saylor. The company now owns more than 2.2% of Bitcoin’s total supply of 21 million coins. These latest purchases are part of MicroStrategy’s ongoing strategy to accumulate Bitcoin through both equity offerings and debt instruments.
Funding and Stock Adjustments for Future Acquisitions
To support its Bitcoin purchases, MicroStrategy sold an additional 2,765,157 shares of its stock, raising $4.35 billion. This was part of its “21/21 plan”, which aims to raise a total of $42 billion to fund Bitcoin acquisitions. The company also gained approval from shareholders to increase the number of authorized Class A common stock and preferred stock, allowing for more flexibility in future Bitcoin purchases.
Redemption of Convertible Notes
In a strategic move, MicroStrategy opted to redeem $1.05 billion worth of 2027 convertible notes and settle all conversion requests using its stock. This decision is likely aimed at reducing the company’s debt and addressing uncertainties regarding tax implications for its Bitcoin holdings under the new FASB accounting rules and the 2022 Inflation Reduction Act.
Continuous Bitcoin Accumulation
MicroStrategy’s acquisition of Bitcoin has now stretched over 12 consecutive weeks, during which the company has spent nearly $20 billion to increase its holdings. Despite this consistent acquisition pattern, MicroStrategy’s stock closed down 5.2% at $353.67 on Friday, reflecting some investor concerns over its premium to net asset value (NAV) and the overall sustainability of its debt-funded Bitcoin strategy.
As of now, MicroStrategy’s market cap stands at $87.2 billion, and its Bitcoin holdings continue to play a crucial role in its overall valuation.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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