MicroStrategy acquires 11,931 BTC for $786 M, strengthens position as largest corporate Bitcoin holder

on Jun 20, 2024
  • MicroStrategy's purchase of 11,931 BTC for $786 M brings its total holdings to 226,331 bitcoins.
  • MicroStrategy's total BTC holding is now valued at nearly $15 billion.
  • The acquisition was funded by an $800 million convertible note offering to institutional investors.

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Nasdaq-listed software firm MicroStrategy (MSTR) has expanded its substantial bitcoin (BTC) holdings, acquiring an additional 11,931 BTC for $786 million.

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This latest acquisition further cements MicroStrategy’s position as the largest corporate holder of bitcoin.

MicroStrategy’s bitcoin accumulation strategy

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Led by Executive Chairman Michael Saylor, MicroStrategy began its aggressive bitcoin accumulation in 2020.

As of the end of April, the company held 214,400 bitcoins. With the recent purchase, the total now stands at 226,331 bitcoins, valued at just under $15 billion, given bitcoin’s current price of approximately $66,000.

The average purchase price for MicroStrategy’s bitcoin holdings is $36,798 per bitcoin, totaling about $8.33 billion.

Funding the bitcoin acquisitions

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This recent purchase was funded by an $800 million convertible note offering to institutional investors.

Initially set at $500 million, the offering size was increased to $700 million and finally closed at $800 million. In March, MicroStrategy added 9,245 BTC for $623 million, also through a similar debt issuance.

Michael Saylor and MicroStrategy have spearheaded a movement encouraging other corporate treasuries to adopt bitcoin as a reserve asset.

Although only a few companies have added bitcoin to their balance sheets, U.S.-listed Semler Scientific (SMLR) has followed in MicroStrategy’s footsteps.

Over the past three weeks, Semler not only added bitcoin as a significant treasury asset but also attempted to tap capital markets to acquire more bitcoin, reflecting MicroStrategy’s strategy.

Market response and outlook

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MicroStrategy’s bold bitcoin strategy has paid off in terms of stock performance. Since the firm’s bitcoin purchases began four years ago, its shares have increased roughly ten-fold.

Similarly, Semler shares have risen by more than 60% since the company disclosed its first bitcoin buys in late May.

Last week, brokerage firm Bernstein initiated coverage of MicroStrategy, setting a $2,890 price target for the company’s shares with an outperform rating.

Following the news of the recent bitcoin acquisition, MSTR is currently up 2% premarket to $1,507.

Implications for the broader market

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MicroStrategy’s continuous bitcoin acquisitions highlight the growing trend of institutional and corporate adoption of cryptocurrencies as part of their treasury strategy.

This trend is further underscored by significant market activities, such as the recent bitcoin purchases by Semler Scientific and the increasing interest from institutional investors facilitated by convertible note offerings.

The move by MicroStrategy not only strengthens its balance sheet but also signals confidence in bitcoin’s long-term value.

With the current market cap of bitcoin and its growing acceptance, the strategic acquisitions by MicroStrategy and other companies could potentially influence broader market trends and investment strategies.

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