MicroStrategy Buys $786 Million More in Bitcoin With Note Proceeds

Infotrading.io - MicroStrategy Inc., the largest corporate holder of Bitcoin, has announced another significant acquisition, purchasing approximately $786 million worth of Bitcoin. This latest purchase, funded by the proceeds from the sale of convertible notes, adds 11,931 BTC to the company's holdings.

Details of the Acquisition

According to a filing with the US Securities and Exchange Commission on Thursday, MicroStrategy acquired the 11,931 Bitcoins between April 27 and June 19. This marks the company's third-largest Bitcoin purchase to date, following a $821 million acquisition of 12,000 tokens on March 11.

MicroStrategy's aggressive strategy of leveraging the debt market to acquire more Bitcoin has seen the company spend over $2.4 billion on the cryptocurrency in 2024 alone. The latest purchase raises MicroStrategy's total Bitcoin holdings to 226,331 BTC, valued at approximately $14.9 billion at current prices. Despite spending only $8.3 billion on these acquisitions, the company's holdings have appreciated significantly, providing an 80% paper gain on its investments.

Strategic Rationale

Michael Saylor, the chairman and co-founder of MicroStrategy, initiated the company's Bitcoin purchasing strategy in 2020, positioning it as an inflation hedge and an alternative to holding cash. Since then, Bitcoin's price has surged around 600%, validating Saylor's strategic foresight.

The recent $800 million convertible note offering, which was initially set at $500 million and later increased to $800 million due to strong investor interest, reflects the market's confidence in MicroStrategy's strategy. This capital raise follows a similar debt issuance in March, where the company added 9,245 BTC for $623 million.

Market Impact and Corporate Influence

MicroStrategy's persistent accumulation of Bitcoin has significantly influenced its stock price, which has skyrocketed over 1,000% since the company's initial Bitcoin purchases. On Thursday, the stock fluctuated between gains and losses while Bitcoin's price remained steady.

The company's strategic moves have not only bolstered its financial position but also inspired other firms to consider Bitcoin as a reserve asset. Notably, U.S.-listed Semler Scientific has followed in MicroStrategy's footsteps, adding Bitcoin to its balance sheet and tapping capital markets to acquire more. Semler's shares have risen by more than 60% since it disclosed its Bitcoin holdings in late May.

Financial and Market Projections

Last week, brokerage firm Bernstein initiated coverage of MicroStrategy with an outperform rating and a price target of $2,890 for the company's shares. MSTR is currently up 2% premarket to $1,507, reflecting investor confidence in MicroStrategy's Bitcoin-centric strategy.

MicroStrategy's latest acquisition and its ongoing strategy to accumulate Bitcoin highlight the company's commitment to leveraging cryptocurrency as a key component of its corporate treasury. This approach has not only delivered substantial financial gains but also positioned MicroStrategy as a leader in the corporate adoption of Bitcoin.

MicroStrategy's $786 million Bitcoin purchase underscores its aggressive and strategic approach to cryptocurrency investment. By continually leveraging the debt market to acquire Bitcoin, the company has significantly enhanced its financial position and influenced broader market trends. As MicroStrategy's Bitcoin holdings grow, so does its impact on the cryptocurrency market and corporate treasury strategies.