MicroStrategy’s Bitcoin Bet Continues: $786M Spent on 11.9K BTC

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As an experienced financial analyst, I believe MicroStrategy’s latest Bitcoin acquisition is a significant move that further solidifies its position as a trailblazer in the corporate world’s adoption of Bitcoin as a strategic asset. The company’s commitment to Bitcoin is unwavering, and its aggressive accumulation strategy demonstrates a strong belief in the cryptocurrency’s long-term potential.

MicroStrategy strengthened its status as the biggest corporate Bitcoin owner by purchasing an additional 11,931 Bitcoin for $786 million, increasing its stash to approximately 226,331 Bitcoin worth around $15 billion.

Acquisition Details

MicroStrategy, the corporation with the largest Bitcoin (BTC) stockpile, has bought an extra 11,931 BTC for a total investment of $786 million as disclosed in a press release and SEC Form 8-K filing on Thursday. With this latest purchase, MicroStrategy now owns about 226,331 BTC in total, which is equivalent to around $14.4 billion at the current Bitcoin price of roughly $64,000.

Funding the Purchase

On June 18, 2024, MicroStrategy successfully conducted a private placement of convertible senior notes to fund an acquisition. Originally intending to secure $500 million, the offering was boosted by robust demand and ultimately brought in a total of $800 million. The convertible notes come with a fixed interest rate of 2.25% and a conversion premium of around 35% above MicroStrategy’s Class A common stock’s VWAP (Volume-Weighted Average Price).

Strategic Implications

As an analyst, I’ve observed MicroStrategy’s strong advocacy for Bitcoin under the leadership of Executive Chairman Michael Saylor since 2020. The company’s bold approach towards acquiring Bitcoin is apparent in this recent purchase, which follows our $623 million investment in 9,245 BTC in March through a similar debt issuance. This latest move reaffirms MicroStrategy’s dedication to Bitcoin as a significant component of our financial strategy.

Blockchain researcher Collin Brown highlighted the scale of this latest purchase in a tweet, 

MicroStrategy’s Significant Bitcoin Purchase: The company has bought an additional 11,931 Bitcoins for approximately $786 million, with each coin costing an average of around $65,883. As a result, their Bitcoin holdings now amount to over 226,331 coins, adding up to roughly $8.33 billion in total value, based on an average purchase price of $36,798 per BTC.

Market Impact

MicroStrategy’s stock has experienced substantial growth as a result of the company’s Bitcoin purchases over the past four years. The value of these bitcoins has approximately quadrupled, causing MicroStrategy’s shares to increase tenfold. Last week, Bernstein started covering MicroStrategy, predicting a share price of $2,890 and assigning an outperform rating. At present, MicroStrategy shares are up 2% before the market opens, priced at $1,507.

Industry Influence

MicroStrategy’s significant Bitcoin investments and continuous buying signal to other businesses and financiers that Bitcoin could be a worthy reserve asset. This decision bolsters the argument for Bitcoin as a respected financial asset, enhancing its place in corporate finance strategies.

Having a Bitcoin haul of 226,331 units, MicroStrategy continues to lead the charge among corporations in adopting the digital currency, possibly paving the way for others to follow suit.

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2024-06-21 16:07