MicroStrategy Continues Bitcoin Purchases, Accumulating BTC Holdings Valued at Nearly $14 Billion
MicroStrategy, a leading business intelligence and software company, has reaffirmed its commitment to Bitcoin by acquiring an additional 122 BTC for $7.8 million in April. This announcement was made by Founder & Chairman Michael Saylor. According to Phong Le, the company’s President and CEO, MicroStrategy is dedicated to enhancing the Bitcoin network through its involvement in the financial markets, advocacy, and technological innovation.
With this recent purchase, MicroStrategy now holds a total of 214,400 bitcoins, which were acquired at an average price of $35,180 each. Since entering the Bitcoin market in August 2020 with an initial $250 million investment, MicroStrategy has been consistently increasing its Bitcoin holdings. Currently, the company’s Bitcoin holdings are valued at nearly $15 billion.
MicroStrategy’s Chief Financial Officer, Andrew Kang, highlighted that the company raised over $1.5 billion in the first quarter through successful convertible debt offerings and purchased an additional 25,250 bitcoins. This marked the 14th consecutive quarter that MicroStrategy has increased its Bitcoin reserves. Kang emphasized that MicroStrategy’s operational strategy, combined with its focus on Bitcoin and technological innovation, provides a unique opportunity for shareholder value creation.
Despite reporting a substantial operating loss of $53.1 million for the first quarter, MicroStrategy did not adopt a new accounting standard that would have reflected its digital assets at fair value. Under the prevailing accounting norms, the company’s Bitcoin was valued at $23,680 per unit by the end of the quarter, totaling $5.1 billion, significantly lower than the market closing price of $71,028 per Bitcoin at the end of March.
MicroStrategy’s controlling shareholder, Michael Saylor, has recently raised approximately $400 million from pre-planned daily sales of about 5,000 shares. These sales were tied to the exercising of options granted to him in 2014. The company’s stock price has doubled this year, reaching around $1,290, outperforming even the gains of Bitcoin. Saylor’s financial moves are strategic, as he intends to cover personal obligations and increase his Bitcoin holdings.
While some have expressed concerns about Saylor’s stock sales, investors are aware that he still retains a substantial portion of the company’s stock. However, skepticism remains, particularly from Kerrisdale Capital Management LLC, which is shorting the stock, citing its performance surpassing the increase in Bitcoin’s value.
MicroStrategy is facing $650 million in convertible bonds set to mature in 2025. The company has the option to settle these bonds in cash or by converting them into company stock. If MicroStrategy chooses conversion, it could create up to 1.63 million new shares, potentially diluting the share value for current shareholders.
