As a seasoned crypto investor with a penchant for strategic moves, I find MicroStrategy’s decision to raise $2 billion to buy more Bitcoin and repay debt intriguing. Having closely watched this company’s bold steps into the crypto realm, I am impressed by their unwavering commitment to Bitcoin.
MicroStrategy aims to gather approximately $2 billion by offering its Class A shares, intending to invest a portion in Bitcoin and also settle existing debts.
In simpler terms, the company with the most public ownership of Bitcoin, MicroStrategy, recently submitted documents for potential fundraising, aiming to collect billions in order to further invest in their cryptocurrency plans. This move comes as Bitcoin’s momentum continues unabated.
As an analyst, I’m sharing insights from a recent regulatory filing made by a Virginia-based company with the U.S. Securities and Exchange Commission. The company has announced its intention to raise approximately $2 billion by offering its Class A shares for sale. Although the specific timetable for this share sale remains undisclosed, the filing indicates that the funds will be utilized for various corporate purposes, notably the acquisition of Bitcoin.
As a financial analyst, I’m sharing our intention. The funds we receive from selling Class A common stocks, as outlined in this prospectus, will primarily be utilized for our company’s general purposes. This may include investments in digital assets like bitcoin, but it’s essential to note that any specific use for these proceeds related to the acquisition of bitcoin will be clearly indicated in the relevant prospectus supplement.
MicroStrategy
The firm didn’t disclose exactly what percentage of the earnings would go towards Bitcoin acquisitions. They mentioned that they haven’t decided yet on how much of the total profits will be allocated for a specific purpose, such as buying Bitcoins.
MicroStrategy wants to buy even more Bitcoin
In parallel with MicroStrategy revealing its Q2 financial data, it was disclosed that the company bought 12,222 Bitcoins during this period, spending approximately $805 million at an average cost of $65,880 per Bitcoin. This latest purchase raises their total Bitcoin holdings to a staggering 226,500 BTC, acquired at a total expense of $8.3 billion as of July 31. Moreover, MicroStrategy introduced a new Key Performance Indicator (KPI), dubbed “BTC Yield,” aiming for annual returns between 4% and 8% over the next three years.
As a researcher, I’ve been following MicroStrategy closely and was eager about their Bitcoin policy plans. However, their Q2 financial results painted a different picture, with software revenue falling short at $111.4 million compared to the expected $119.3 million, as reported by Bloomberg. The company also posted a net loss of approximately $102 million, contrasting the net income of $22.2 million they had earlier. Consequently, MicroStrategy’s shares (MSTR) dipped by over 6.3%, dropping to $1,511, as per data from Google Finance.
MicroStrategy has frequently resorted to selling shares to finance its Bitcoin investments. In late 2023, they sold shares worth $750 million, planning to buy more Bitcoin. Later reports indicated significant purchases of Bitcoin, underscoring their dedication to a strategy heavily focused on Bitcoin.
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2024-08-03 01:44