Michael Saylor’s MicroStrategy Buys 11.9K More Bitcoin: What’s the Impact?

MicroStrategy, led by Executive Chairman Michael Saylor, has acquired an additional 11,931 Bitcoins for $786 million. This latest purchase increases the company’s total Bitcoin holdings to 226,331 tokens, valued at nearly $15 billion at the current Bitcoin price of approximately $66,000. The average acquisition price for these Bitcoins stands at $36,798, totaling about $8.33 billion in investment.

 

Key Points

  • MicroStrategy’s latest acquisition of 11,931 Bitcoins brings its total holdings to 226,331 BTC.
  • The purchase was funded through an $800 million convertible note offering.
  • MicroStrategy’s shares have increased nearly tenfold since beginning Bitcoin purchases in 2020.
  • Brokerage firm Bernstein has set a $2,890 price target for MicroStrategy, reflecting strong confidence in its strategy.

Funding the Purchase

The acquisition was funded through an $800 million convertible note offering to institutional investors. Initially planned for $500 million, the offering was raised to $700 million before closing at $800 million. This follows a similar strategy in March when MicroStrategy added 9,245 BTC for $623 million, also funded by a debt issuance. “This convertible note offering underscores our confidence in Bitcoin’s long-term potential,” Saylor noted in a recent statement.

MicroStrategy’s aggressive Bitcoin accumulation began in 2020, with the company aiming to position BTC as a reserve asset for corporate treasuries. This strategy has inspired other companies, including U.S.-listed Semler Scientific (SMLR), which recently added Bitcoin to its treasury and plans to raise capital for further purchases. Semler shares have increased by over 60% since announcing its Bitcoin acquisitions in late May.

Market Reaction and Future Prospects

MicroStrategy’s Bitcoin strategy has significantly impacted its market performance. Since the company’s initial Bitcoin purchases four years ago, its shares have risen nearly tenfold. Last week, brokerage firm Bernstein initiated coverage of MicroStrategy with an “outperform” rating and a $2,890 price target for the company’s shares, which are currently up 2% premarket at $1,507.

Bernstein’s analysis reflects a growing confidence in MicroStrategy’s approach, emphasizing the potential for substantial returns. “MicroStrategy’s commitment to Bitcoin as a core asset underlines a strategic shift that could reshape corporate treasury management,” stated a Bernstein analyst.

The company’s recent Bitcoin acquisition aligns with its broader strategy of leveraging debt to increase its Bitcoin holdings, a move that has attracted significant attention in the financial community. With the total value of its Bitcoin holdings nearing $15 billion, MicroStrategy continues to be a leading proponent of Bitcoin adoption in the corporate sector.

Conclusion

MicroStrategy’s acquisition of 11,931 additional Bitcoins highlights its ongoing commitment to Bitcoin as a strategic asset. Funded through a substantial convertible note offering, this purchase brings the company’s total holdings to 226,331 Bitcoins. The move underscores the growing trend of institutional investment in cryptocurrency, driven by confidence in Bitcoin’s long-term potential. As MicroStrategy’s shares continue to rise, the company’s bold strategy serves as a model for other corporations considering similar investments in digital assets.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments