thecryptobasic.com
MicroStrategy, under the leadership of Michael Saylor, has invested heavily in Bitcoin once again, acquiring 11,931 BTC at a cost of about $786 million.
The disclosure was made in a recent Form 8-K submission to the U.S. Securities and Exchange Commission (SEC). The firm financed this purchase via a private placement of convertible notes, finalized on June 18, 2024. The Crypto Basic called attention to this offering in a report last week.
MicroStrategy has acquired an additional 11,931 BTC for ~$786.0M using proceeds from convertible notes & excess cash for ~$65,883 per #bitcoin. As of 6/20/24, $MSTR hodls 226,331 $BTC acquired for ~$8.33B at average price of $36,798 per bitcoin.https://t.co/jE9dGqqnON
— Michael Saylor⚡️ (@saylor) June 20, 2024
The offering featured a 2.25% coupon and a conversion premium of 35% over the average price of MicroStrategy’s class A stock. Initially intended to raise $700 million, strong market demand resulted in the offering being increased to $800 million, including the option for purchasers to acquire more notes.
The net proceeds from the offering were approximately $786 million. MicroStrategy utilized these funds, along with surplus cash, to buy the Bitcoin between April 27, 2024, and June 19, 2024. The company purchased the BTC at an average price of $65,883 per coin.
After this recent acquisition, MicroStrategy and its subsidiaries collectively own 226,331 Bitcoin. This entire holding was obtained at an aggregate cost of roughly $8.33 billion. The average purchase price for their Bitcoin holdings, including all related fees and expenses, is about $36,798 per coin.
MicroStrategy Bullish on Bitcoin
With Bitcoin currently trading at $64,876, MicroStrategy’s holdings are now valued at $14.68 billion, resulting in an unrealized profit of $6.35 billion. It’s worth noting that during the 2022 bear market, when Bitcoin’s price dropped below $20,000 at times, the company experienced losses on its Bitcoin investment.
The recent market turnaround has changed MicroStrategy’s fortunes. The firm’s commitment to investing in Bitcoin highlights its conviction in the asset’s role as a reliable store of value. Chairman Michael Saylor has consistently championed Bitcoin, advocating it as a hedge against inflation.
The cryptocurrency market has seen significant volatility, with BTC now below the $65,000 support, but MicroStrategy remains bullish in the long-term. The company’s strategy involves using Bitcoin as its primary treasury reserve asset.
This approach is somewhat unique among publicly traded companies. Saylor previously noted that the firm does not wish to sell any of its BTC. MicroStrategy bought $632 million worth of Bitcoin on March 19, and procured 12K BTC for $821 million on March 11. They had also purchased 3,000 more tokens in February.