MicroStrategy could buy more Bitcoin by selling $500 million in shares

In its most recent SEC filing, business intelligence software company MicroStrategy has revealed its intention to buy more Bitcoin, Bloomberg reported yesterday. With over 129,000 BTC in its possession, MicroStrategy is already the largest corporate shareholder of Bitcoin.

The prospectus, filed on Friday, stated that MicroStrategy has entered into an agreement to sell $500 million in shares of Class A common stock to investment bank Cowen & Co.

Despite the uncertainties and fluctuations in the Bitcoin market, the firm intends to continue to pursue its goal of acquiring more BTC:

“We intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin, unless otherwise indicated in the applicable prospectus supplement.”

While no specific date was provided for the sale, the firm also added that it aims to retain future earnings for either the purchase of additional Bitcoin or the development of the software business.

As recently shown by Bitcoin Treasuries data, MicroStrategy’s BTC reserve has dipped to nearly $2.8 billion. This could be a motivator for the firm’s intentions to buy the dip.

Bitcoin traded below $20,000 last week, a steep decrease from its all-time high of $68,789 in November 2021. Further wild fluctuations in the price of Bitcoin could impact its decision on future holdings, the firm explained:

“Future fluctuations in Bitcoin trading prices may result in our converting Bitcoin purchased with the net proceeds from this offering into cash with a value substantially below the net proceeds from this offering”

The company further stated that it may sell Bitcoin to generate cash for “treasury management and other general corporate purposes.” However, it has no plans to trade derivative contracts with its holding. The firm will continue to monitor market conditions to determine its further steps.

In August, MicroStrategy co-founder Michael Saylor stepped down from his position as CEO to focus on his advocacy efforts on Bitcoin holding.