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

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

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MicroStrategy has further solidified its position as the largest corporate holder of Bitcoin by acquiring 11,931 BTC for $786 million, bringing its total holdings to 226,331 BTC valued at nearly $15 billion.

Acquisition Details

MicroStrategy, the largest corporate holder of Bitcoin (BTC), has acquired an additional 11,931 BTC for $786 million. The purchase was confirmed through a press release on Thursday morning and detailed in a United States Securities and Exchange Commission (SEC) Form 8-K filing. This acquisition brings the company’s total Bitcoin holdings to 226,331 BTC, worth approximately $14.4 billion at the current Bitcoin price of around $64,000.

Funding the Purchase

MicroStrategy completed a private offering of convertible senior notes to finance this acquisition on June 18, 2024. The offering initially aimed to raise $500 million but was upsized due to strong demand, eventually closing at $800 million in aggregate principal amount. The convertible notes feature a 2.25% coupon rate and a conversion premium of approximately 35% over MicroStrategy’s Class A common stock's volume-weighted average price.

Strategic Implications

Led by Executive Chairman Michael Saylor, MicroStrategy has been a prominent advocate for Bitcoin since 2020. The company's aggressive Bitcoin accumulation strategy is evident in this latest purchase, which follows a $623 million acquisition of 9,245 BTC in March through a similar debt issuance. This continued investment in Bitcoin underscores MicroStrategy’s commitment to the cryptocurrency as a key asset in its financial strategy.

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

“MicroStrategy’s massive BTC boost! They’ve snapped up 11,931 more bitcoins for $786M, averaging $65,883 each. As of 6/20/24, they hodl 226,331 BTC, totaling $8.33B with an average buy-in of $36,798 per BTC.”

Market Impact

MicroStrategy’s shares have significantly benefited from the firm’s Bitcoin acquisitions, rising roughly tenfold since the company began purchasing Bitcoin four years ago. Last week, brokerage firm Bernstein initiated coverage of MicroStrategy, setting a price target of $2,890 per share with an outperform rating. As of the latest reports, MSTR shares are up 2% premarket, trading at $1,507.

Industry Influence

MicroStrategy’s substantial Bitcoin holdings and ongoing purchases may influence other corporations and investors to consider Bitcoin as a viable reserve asset. This strategic move reinforces the narrative of Bitcoin's potential as a mainstream financial asset, further legitimizing its role in corporate treasury management.

With a total holding of 226,331 BTC, MicroStrategy remains at the forefront of corporate Bitcoin adoption, potentially setting a precedent for other firms.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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