MicroStrategy purchases an additional 3,907 BTC for $177M

By: Jinia Shawdagor
Jinia Shawdagor
Jinia is a cryptocurrency and blockchain enthusiast based in Sweden. She loves everything positive, travelling, and extracting joy and… read more.
on Aug 24, 2021
  • MicroStrategy currently holds 108,992 BTC worth approximately $5.254 million.
  • The firm bought these coins after selling 238,053 MSTR shares between June 1 and August 23.
  • Michael Saylor believes buying BTC is like investing early in large tech firms like Facebook.

Business intelligence and mobile software company MicroStrategy has added 3,907 more Bitcoin (BTC/USD) to its vast holdings of the leading cryptocurrency. The company unveiled this news earlier today through a filing with the US Securities Exchange Commission. Reportedly, this was not a one-time purchase.

According to the filing, the company spent $177 million (£129.04 million) between July 1 and August 23 to purchase the 3,907 BTC. The company further disclosed that this data means it spent an average of $45,294 (£33,020.46) per BTC, inclusive of all charges and expenses. With this purchase, the company’s BTC holdings have expanded to 108,992 coins.

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Explaining where it got the funds to purchase the BTC, MicroStrategy cited a previous disclosure on June 14, 2021, when it entered into an Open Market Sale Agreement with Jefferies LLC. The deal involved Jefferies acting as an agent and MicroStrategy issuing and selling shares of its Class A common stock (MSTR).

Earlier today, MicroStrategy announced that it managed to issue and sell 238,053 shares through Jefferies between July 1, 2021, and August 23, 2021. Reportedly, the company sold each share at an average gross price of $753.21 (£549.11). After settling sales commission and expenses, MicroStrategy remained with approximately $177.5 million (£129.40 million).

Michael Saylor defends MicroStrategy’s strategy

This news comes after MicroStrategy offered $500 million worth of senior secured notes to purchase more BTC in Q2, 2021. The company then bought more BTC despite knowing that it would suffer an impairment loss of more than $284 million (£207.04 million) in the quarter. This left a lot of tongues wagging, with Marc Lichtenfeld, the Chief Income Strategist at Oxford Club, saying borrowing such a large amount of money to gamble on a volatile asset is irresponsible of the company.

However, MicroStrategy’s CEO, Michael Saylor, has not swayed from his decision to steer the company the BTC way.

In a recent interview, he said,

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? I mean, if I could borrow $1 billion and buy Facebook a decade ago for 1% interest, I think I would’ve done quite well.

Meanwhile, BTC has slipped below the $50,000 (£36,451.25) level once again after trading as high as $50,482.08 (£36,802.70) yesterday. At the time of writing, BTC is changing hands at $48,165.09 (£35,113.55) after shedding 2.85% of its value over the past 24 hours.

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