Microstrategy to Sell $1B in Stock to Purchase Additional BTC

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  • Microstrategy has revealed its intentions to sell up to $1 billion in stock to acquire more Bitcoin.
  • Just today, the company completed the sale of $500 million in bonds and will use its proceeds to buy Bitcoin.
  • Microstrategy has gained around $1.5 billion in profit over its initial investment of $2.2 billion in Bitcoin.

Evidently, Microstrategy is on a Bitcoin buying spree, athirst to acquire more and more of the leading cryptocurrency. The company, which is managed by the Bitcoin maximalist Michael Saylor, has recently demonstrated great tenacity in purchasing Bitcoin, especially since the leading cryptocurrency is perceived to be in a dip.

A couple of days ago, on June 8, Microstrategy announced that they intend to sell $500 million of junk bonds — and to use proceeds to buy Bitcoin. Today, as the company announced it had completed the sale of $500 million in bonds, Microstrategy also revealed its intentions to sell up to $1 billion in stock to acquire yet more Bitcoin.

CEO Michael Saylor had previously asserted that buying Bitcoin is one of the two corporate strategies of Microstrategy. He stated:

The Company remains focused on our two corporate strategies of growing our enterprise analytics software business and acquiring and holding bitcoin.

Why Does Microstrategy Keep Acquiring Bitcoin?

While Microstrategy’s initial dabbling in Bitcoin was interpreted as a bet on the volatility of the leading cryptocurrency, the company asserted that they purchase Bitcoin to hedge against inflation as well as earn a higher return on the original investment.

Phong Le, President & CFO at MicroStrategy, said Bitcoin promises a higher return, and is more secure against inflation compared to cash. “The Company continues to believe bitcoin will provide the opportunity for better returns and preserve the value of our capital over time compared to holding cash,” he stated.

At press time, the company holds 92,079 Bitcoin, worth more than $3.7 billion. Though, it is worth mentioning that the company has invested an aggregate of approximately $2.2 billion, garnering a whopping $1.5 billion in profit despite Bitcoin losing more than a third of its value.

Microstrategy’s stock has also witnessed a surge since the company dabbled in Bitcoin. The business intelligence software firm’s stock was trading at around $134 per share on the first day it purchased Bitcoin. However, in a matter of 7 months, the company’s stock prices recorded an all-time high of $1,272 — more than 950% growth.

However, Microstrategy’s stock prices have since then dropped to as low as $460. Though, last week, the firm’s stock prices surged to around $600, arguably due to the attention it received because of its Bitcoin purchasing update.