MicroStrategy Expands Bitcoin Holdings

Business intelligence firm and corporate bitcoin holder MicroStrategy acquired an additional 10,107 BTC for approximately $1.1 billion at an average price of $105,596 per bitcoin between Jan. 21 and Jan. 26, according to an 8-K filing with the Securities and Exchange Commission on Monday.

The company now holds a total of 471,107 BTC, valued at over $46 billion. MicroStrategy’s total bitcoin holdings were purchased at an average price of $64,511 per bitcoin, amounting to a total cost of around $30.4 billion, including fees and expenses, as per co-founder and executive chairman Michael Saylor. This means that MicroStrategy now holds more than 2.2% of bitcoin’s total supply of 21 million.

These latest acquisitions follow the sale of 2,765,157 MicroStrategy shares during the same timeframe for a similar amount. By Jan. 26, the company reported approximately $4.35 billion worth of shares remaining for sale as part of its “21/21 plan,” which aims to raise a total of $42 billion via equity and fixed-income securities offerings for further bitcoin purchases.

On Tuesday, MicroStrategy shareholders voted to expand this plan by approving two amendments allowing the company to increase the number of authorized Class A common stock and preferred stock, facilitating more bitcoin purchases.

On Friday, the firm decided to redeem $1.05 billion worth of 2027 convertible notes and utilize MicroStrategy’s shares to settle all conversion requests. This could be an attempt to reduce the company’s debt and incentivize noteholders to convert their stakes to company equity, especially amid uncertainties regarding the tax treatment of MicroStrategy’s bitcoin holdings due to new FASB accounting rules and elements of the 2022 Inflation Reduction Act.

Three Months of Continuous Bitcoin Acquisitions

MicroStrategy’s recent announcement marks the twelfth consecutive week of acquisitions, coinciding with news from the previous Monday about the company acquiring another 11,000 BTC for roughly $1.1 billion in cash at an average estimated price of $101,191 per coin, alongside $243 million worth of bitcoin the week prior. Saylor provided an update on MicroStrategy’s bitcoin purchase tracker on Sunday, indicating the possibility of another bitcoin acquisition filing on Monday.

Over the past few months, MicroStrategy has purchased nearly $20 billion worth of bitcoin, and its market cap of $87.2 billion trades at a strong premium to its bitcoin net asset value. Some investors have expressed concerns regarding the company’s premium to NAV valuation and its strategy of acquiring bitcoin through equity and debt financing.

MicroStrategy shares closed down 5.2% at $353.67 on Friday, having surged more than 681% in the past year according to TradingView. MSTR has also seen a 5.6% decline in pre-market trading on Monday.