By
Chimamanda U. Martha
April 25th, 2024
United States based business intelligence firm, MicroStrategy, has announced the purchase of 3,907 bitcoins for approximately $177.0 million in cash, at an average price of approximately $45,294 per bitcoin, inclusive of fees and expenses.
MicroStrategy Inc (NASDAQ: MSTR) officially announced the additional purchase in its most recent filing with the US Securities and Exchange Commission (SEC) during the third quarter of the current fiscal year. According to the filing, the purchase, which became public on August 24, has an average purchasing price of $45,294 per coin.
MicroStrategy has purchased an additional 3,907 bitcoins for ~$177 million in cash at an average price of ~$45,294 per #bitcoin. As of 8/23/21 we #hodl ~108,992 bitcoins acquired for ~$2.918 billion at an average price of ~$26,769 per bitcoin. $MSTRhttps://t.co/8jUlJImJbO
— Michael Saylor⚡️ (@saylor) August 24, 2021
As of August 23, a day before the filing, the Company holds approximately 108,992 bitcoins that were acquired at an aggregate purchase price of $2.918 billion and an average purchase price of approximately $26,769 per Bitcoin (BTC), inclusive of fees and expenses.
“As previously disclosed, on June 14, 2021, the Company entered into an Open Market Sale AgreementSM with Jefferies LLC pursuant to which the Company may issue and sell shares of its class A common stock, par value $0.001 per share (Shares), having an aggregate offering price of up to $1.0 billion from time to time through Jefferies,” the filing read in parts.
The latest purchase it made was financed with the proceeds generated from the $177.5 million sale of its class A common stock. Recall that the stock was part of its agreement with Jefferies Group that was initially announced on June 14. However, despite the purchase, the price of bitcoin did not experience any major move as it remains under pressure after reclaiming the $50,000 level for the first time since mid-May on Aug. 23.
Currently, the largest cryptocurrency is trading at $49,211 on the Bitstamp exchange.
MicroStrategy Stock Rises
Interestingly, the company’s massive Bitcoin bet recently clocked a year. During that period, the company’s stock grew by nearly 450 percent and its Chief Executive Officer, Michael Saylor also became a rockstar within the cryptocurrency community with a whopping 1.4 million Twitter followers.
The company’s continued embracement of Bitcoin follows last week’s statement by its CEO who said borrowing money now to buy more bitcoin (BTC, -2.32%) was like investing in one of today’s dominant tech companies in the early days.
“If you borrow billions of dollars at 1% interest and invest it in the next Big Tech digital network that you thought was going to be the dominant Amazon or Google or Facebook of money, why wouldn’t you?”, Taylor asked rhetorically.
He noted that his company has $2.2 billion of debt and pays about 1.5% interest on that debt. Since last August, his company has financed its purchases of massive amounts of bitcoin using company cash flows, equity issuance, convertible debt, senior secured debt, and a $1 billion shelf registration.
He added that nevertheless, the company’s stock, which closed out Monday’s session at $718, is still down 43% from its March high of $1,273.