Buying $750M In Bitcoin? MicroStrategy Prepares Stock Sale

MicroStrategy Incorporated (NASDAQ: MSTR), one of the most prominent corporate Bitcoin holders globally, has announced plans to sell up to $750 million of its Class A common stock. The company signaled that the proceeds could potentially fund further BTC purchases.

The business intelligence firm filed with the U.S. Securities and Exchange Commission (SEC) on August 1, 2023, laying out its intent to sell shares of its Class A common stock, offering a prospectus supplement of up to $750 million. This move, in partnership with Cowen and Company, Canaccord Genuity, and Berenberg Capital, might signal another bold stride into the Bitcoin realm.

A Firm Bitcoin Strategy?

The software development firm has consistently articulated its commitment to Bitcoin, positioning itself as one of the cryptocurrency’s staunchest institutional supporters. In its SEC filing, MicroStrategy stated that it might use the proceeds of this proposed sale for a variety of corporate purposes, including potentially acquiring more Bitcoin.

“As with prior programs, we may use the proceeds for general corporate purposes, which include the purchase of Bitcoin as well as the repurchase or repayment of our outstanding debt,” said Andrew Kang, MicroStrategy’s CFO, during a recent earnings call.

MicroStrategy’s chairman, Michael Saylor, also echoed the company’s Bitcoin-centric strategy: “Our objective is to find ways to generate incremental Bitcoin for our shareholders and do that with either cash flow from the business or do it through intelligent accretive financings of equity or debt or other intelligent operations.”

It’s important to note that it’s uncertain whether MicroStrategy will utilize the full $750 million to purchase BTC. Nonetheless, it’s highly likely that a substantial sum will probably be invested in BTC.

Is Michael Saylor orchestrating a $750 million MSTR stock sale to buy even more #Bitcoin? pic.twitter.com/MXrm6oayPw

— Jake Simmons (@realJakeSimmons) August 2, 2023

Bold Moves in Q2 2023

In Q2 2023, MicroStrategy significantly expanded its Bitcoin holdings, adding a total of 12,800 BTC to its portfolio. This move is the largest increase in a single quarter since Q2 2021. The firm now reportedly holds a staggering 152,800 BTC, valued at approximately $4.5 billion at current market prices.

Furthermore, Saylor announced via Twitter: “In July, MicroStrategy acquired an additional 467 BTC for $14.4 million and now holds 152,800 BTC.”

Remarkably, MicroStrategy’s Bitcoin-centric strategy seems to have resonated positively within the investment community. The company’s share price has surged nearly 200% since the beginning of the year, with MSTR shares rising from $145.02 per share on January 3, to $434.98 at press time.

Beyond Bitcoin

Alongside the BTC acquisitions, MicroStrategy continues to innovate in its primary business intelligence industry. The company’s Q2 report highlighted the release of the MicroStrategy ONE platform, a product designed to integrate business intelligence and artificial intelligence.

MicroStrategy’s CEO, Phong Le, lauded the product, saying, “Our new MicroStrategy ONE platform is the most important product innovation in the history of our company because it represents a fundamental shift in our industry to harness the power of business intelligence and artificial intelligence together to upgrade the way organizations do business.”

At press time, BTC traded at $29,677.

Featured image from iStock, chart from TradingView.com