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Saturday, December 2, 2023

Bitcoin investment: MicroStrategy raises $ 500 million

To stock up on Bitcoins again, the US company MicroStrategy has issued corporate bonds worth half a billion US dollars.

• MicroStrategy sells corporate bonds for the first time to invest in crypto
• New plans have already been announced to further increase Bitcoin holdings
• MicroStrategy shares and the Bitcoin price benefited
MicroStrategy continues to invest in Bitcoin . As recently as February, the US software company invested around one billion US dollars in what is still the largest cryptocurrency by market capitalisation – convertible bonds were also issued. In mid-June, the company raised another 488 million US dollars – for the first time through the sale of corporate bonds – in order to be able to buy more Bitcoins, as the corresponding press release states: “MicroStrategy intends to use the net proceeds from the sale of the bonds for the Acquiring more Bitcoin to use “. The original plan was to raise $ 400 million, as the company announced on June 7th. Then, today, MicroStrategy bought bitcoins worth $ 489 million.

Largest Bitcoin holding by a publicly traded company

MacroStrategy LLC, a subsidiary founded by MicroStrategy specifically for this purpose, previously held 92,079 tokens – more than any other listed company – worth around 3.2 billion US dollars (as of June 20, 2021 7:15 pm Clock). At the current Bitcoin rate, MicroStrategy was able to buy another 13,005 coins of the 489 million US dollars. The company now holds 105,085 bitcoins.
Since all of the newly raised capital was used to buy bitcoins, MicroStrategy’s share price is closely tied to the development of the extremely volatile cryptocurrency. Some experts are therefore critical of the US company’s strategy: “It [the US $ 500 million] is used to speculate on a volatile asset. Does MicroStrategy still have a business or is it simply a proxy for Bitcoin – with borrowed money Money? “, Bloomberg reproduces the words of Marc Lichtenfeld, chief income strategist at the Oxford Club.
Nevertheless: After the announcement that MicroStrategy was able to collect almost 500 billion US dollars, the stocks on the NASDAQ rose by over 15 percent. Since the beginning of the year, MicroStrategy shares have even risen by around 66 percent. However, it remains to be seen how the share will continue and whether MicroStrategy’s approach will make sustainable sense.

MicroStrategy still in the buying mood

But Michael Saylor, CEO of MicroStrategy, is apparently still not satisfied with that: It was recently announced that another billion US dollars are to be invested in Bitcoin, as the CEO himself revealed on Twitter :

To that end, the Bitcoin bull is considering selling shares in the company this time around. The company submitted an application to the US Securities and Exchange Commission (SEC). In the S-3 filing, MicroStrategy announced that it would be making “at the market” securities offers that would enable it to sell up to $ 1 billion in Class A Common Stock. “We intend to use the net proceeds from the sale of Class A common stock offered under this Prospectus for general corporate purposes, including the acquisition of Bitcoin, unless otherwise specified in the relevant Supplement. which is to be used specifically for a specific purpose, not specified “.

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The software company’s stock climbed to $ 630.54 by the end of trading, more than 5 percent above the previous day’s level. In addition to the MicroStrategy share, the cryptocurrency itself also benefited from the announcement: Bitcoin was able to stay above the USD 40,000 mark for two days in a row, at times it even climbed to USD 40,934. In the meantime, however, the cryptocurrency had to give up these profits.

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