MicroStrategy Plans to Buy Bitcoin By Raising an Additional $750 Million Through Stock Sale
Business intelligence firm MicroStrategy, also the largest corporate holder of Bitcoins, unveiled its second-quarter results on Tuesday, August 1, by disclosing its Bitcoin holdings and trades during this period.
During the last month of July, MicroStrategy acquired an additional 467 BTC for $14.4 million and now holds 152,800 BTC on its balance sheet. During the second quarter, MicroStrategy made its biggest Bitcoin purchase since the peak of prices in late 2021, acquiring approximately $361.4 million worth of Bitcoin. This increased the total Bitcoin purchases by MicroStrategy to around $4.53 billion.
On Tuesday, MicroStrategy also submitted a filing to the U.S. Securities and Exchange Commission (SEC) announcing its plans to raise an additional $750 million via an MSTR stock sale while adding that they would be using these proceeds to purchase additional Bitcoins.
Additionally, Microstrategy also announced that it entered into a sales agreement with three companies, namely Cowen and Company, Canaccord Genuity, and Berenberg Capital, for the sale of its class A common stock. The company stated that the proceeds from this sale could be utilized for various general corporate purposes, including acquiring more Bitcoin and supporting working capital needs.
During the second-quarter earnings call, MicroStrategy chief Michael Saylor said: “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”.
In 2020, Saylor initiated the purchase of Bitcoin, as he believed it was essential to decrease the company's cash holdings due to concerns about inflation. This decision was made amid stagnant revenue from the software business. As part of the dual strategy, Saylor relinquished his CEO title a year ago to concentrate on the Bitcoin aspect of the company.
Post its Tuesday Q2 earnings announcement, Bitcoin made a quick recovery to $30,000 surging past MicroStrategy’s average holding price of $29,672 per BTC. Bitcoin ended the second quarter with a 7% increase, reaching $30,390. This growth followed a substantial surge of nearly 72% in the first quarter. However, during the same period last year, the leading digital currency experienced a sharp decline of 59%, dropping to $18,731.
MicroStrategy's shares, which are often considered a proxy for Bitcoin among equity investors, showed little change after regular trading closed, hovering around $434. This year, the stock has more than tripled, bouncing back from a significant 74% decline in 2022. At its peak in February 2021, the stock reached an impressive $1,315.