MicroStrategy announced a $ 489 million investment in Bitcoin. The company purchased 13 thousand coins at an average rate of $ 37.6 thousand. Currently, the software manufacturer owns 105 thousand Bitcoin and remains the largest holder of cryptocurrency among public companies.
On June 14, MicroStrategy announced that it had completed a $ 500 million bond placement. These funds were raised to buy cryptocurrency.
The company also announced that it could sell its own shares worth up to $ 1 billion for additional investments in cryptocurrency. MicroStrategy filed a corresponding application with the US Securities and Exchange Commission (SEC).
The price of Bitcoin has plummeted over the past few days and currently one Bitcoin is worth around $ 31,500. This comes amid China’s ongoing crackdown on mining centers. Since Microstrategy shares are pegged to BTC, they too fell more than 6%.
Previous purchases of Bitcoin by the company
MicroStrategy, registered on the Nasdaq, started buying Bitcoin back in August last year. The aggregate purchase price of all Bitcoins is around $ 2.75 billion with an average purchase price of around $ 26,080 per Bitcoin.
In August 2020, MicroStrategy invested $ 250 million in Bitcoin. Later, the firm’s board of directors approved a policy of increasing investment in the first cryptocurrency at the expense of cash reserves.
In December, the company placed $ 650 million in convertible bonds to buy digital gold.
Then, in February 2021, the software provider additionally issued more than $ 1 billion in debt securities and again invested the funds raised in cryptocurrency.
In March, MicroStrategy acquired 328 BTC, about 205 BTC and 262 BTC. The firm invested $ 15 million each in digital gold in April and May. The company later bought 229 BTC for $ 10 million.
How the purchase of BTC affected MicroStrategy’s business
Michael Saylor, CEO of the company says:
“We changed our shareholder base and turned into a company that can sell enterprise software as well as acquire and store Bitcoin, and we have successfully done that with leverage”.
The software developer also decided to sell more shares worth $ 1 billion so that they can fund more Bitcoin purchases.
All of these purchases were a big benefit for the company, as annual revenues jumped to 10%. Saylor says:
“This has increased the power of the brand by 100 times. We just had our best software quarter in 10 years, last quarter”.
Microstrategy also showed an advantage in terms of share price. Last August, when they first started buying BTC, their share price was around $ 120. Today it stands at $ 580, which means a dramatic increase of over 400%.
“Bitcoin business generates income for shareholders. I think the staff are happy. The shareholders are happy”.