MicroStrategy (MSTR) Sells Stock to Buy Bitcoin... "Sweeping Up at $85,000"

▲ Bitcoin (BTC), MicroStrategy (MSTR)/AI-generated image

MicroStrategy (MSTR) added 1,665 Bitcoins (BTC) to its holdings, increasing its total to 847,666 BTC. The company continued its aggressive financial strategy by purchasing Bitcoin with funds raised through stock issuance while simultaneously buying back its preferred shares.

According to virtual asset specialized media Cointelegraph on September 28 (local time), MicroStrategy invested approximately $142.7 million to purchase 1,665 BTC from September 21 to 27. The average purchase price, including fees and expenses, was $85,681 per BTC. With this purchase, MicroStrategy's total Bitcoin holdings increased to 847,666 BTC. The total funds invested in Bitcoin purchases to date amount to approximately $63.95 billion, with an overall average purchase price of $75,437 per BTC.

This purchase was made by reactivating the common stock at-the-market offering program. MicroStrategy announced in a disclosure filed with the U.S. Securities and Exchange Commission (SEC) that it secured net proceeds of $246.2 million from the sale of 1.47 million shares of MSTR common stock. Of the funds raised, $142.7 million was allocated to Bitcoin purchases, and the remaining $103.5 million was invested in STRC preferred stock buybacks.

The company also used additional cash on hand for preferred stock purchases. MicroStrategy spent a total of $151.7 million to acquire 1.53 million shares of STRC preferred stock, covering a shortfall of $48.1 million with its existing dollar cash reserves, in addition to the remaining funds from the public offering. As a result, the company's dollar cash balance slightly decreased from $1.05 billion the previous week to $1.0 billion. Dollar reserves separately managed for preferred stock dividends and debt interest payments also saw a slight reduction from $5.04 billion to $5.02 billion after a dividend payment of $22.1 million.

Following the purchase of 950 BTC in the previous week, large-scale purchases have been made for two consecutive weeks, firmly maintaining a concentrated investment in Bitcoin. In the previous week, Bitcoin was purchased at $79,670 per BTC using cash on hand, but this time, as Bitcoin rebounded into the mid-$80,000 range, purchases continued at a higher price through new stock issuance. Michael Saylor, the founder and chairman of MicroStrategy, hinted at Bitcoin accumulation by posting "much more orange" on social media.

MicroStrategy's Bitcoin accumulation strategy, which organically combines stock issuance and share buybacks, is attracting market attention. Investors are keen to see if MicroStrategy, having secured a massive volume of over 840,000 BTC, can successfully defend its corporate value amidst debates about Bitcoin's peak.

[Key Article Summary]

-MicroStrategy additionally purchased 1,665 BTC for $142.7 million, bringing its total holdings to 847,666 BTC.

-With $246.2 million raised from the sale of MSTR common stock, Bitcoin purchases and STRC preferred stock buybacks were conducted simultaneously.

-The total cumulative purchase amount is $63.95 billion, and the overall average purchase price is $75,437 per BTC.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*