MicroStrategy Wants to Raise Up To $500 Million; to Buy Bitcoin?

MicroStrategy Bitcoin

MicroStrategy LLC ($MSTR) is raising up to $500 million in funds that could possibly be used to buy Bitcoin (BTC), the largest cryptocurrency in the world. The company is already holding 0.618% of Bitcoin’s supply, equal to 129,698 BTC, and this number could move even higher if it reaches its financing goal of $500 million. This is according to a filing by the company with the U.S. Securities and Exchange Commission (SEC). The funds would come from the sale of Class A shares. 

MicroStrategy Searches for $500 Million in Funding

The software and business intelligence company MicroStrategy is searching for $500 million in funding that could be used to buy more Bitcoin. In an SEC filing, the company explains that it is offering Class A shares through Cowen & Co. and BTIG LLC. Nevertheless, there is no information about the date for the sale of these shares. 

The official information released by MicroStrategy reads as follows:

“We have entered into a Sales Agreement with Cowen and Company, LLC and BTIG, LLC, dated 9, 2022, relating to the sale of shares of our Class A common stock, per value $0.001 per share, offered by this prospectus supplement.”

MicroStrategy’s turn toward Bitcoin started in 2021 when Michael Saylor, the former CEO of the company, decided to become a strong Bitcoin supporter. In 2021, Bitcoin skyrocketed to $69,000, the highest price ever reached by Bitcoin. At the same time, Saylor became a strong Bitcoin believer and promoted its use cases online, especially on Twitter. 

Nevertheless, Michael Saylor stepped down as the Chief Executive Officer of the company a few months ago. He claims that he will continue to focus on the Bitcoin strategy of the company. Another thing to mention about Saylor is that he continues to serve as executive chairman, which means that he still has a strong influence on the company’s decisions. 

In the filing, the company explained that they might use the net proceeds of the offering to purchase additional Bitcoin. Furthermore, they mentioned that they have not targeted any specific amount of Bitcoin holdings. In the future, they could continue to monitor the market conditions and decide whether to buy more Bitcoin

It is also worth pointing out that other companies have also purchased Bitcoin and are now holding BTC. For example, Tesla, Inc, is currently holding 10,800 BTC, or 0.051% of the total Bitcoin supply. Furthermore Core Scientific is the third-largest company holding Bitcoin with 8,497 BTC, or 0.040% of the total Bitcoin supply. 

Just to compare it with El Salvador, the first country in the world to make Bitcoin legal tender, the country is now holding 1,771 BTC (0.003% of the Bitcoin supply). The future could be very positive for Bitcoin if more companies enter the market and start investing in the largest digital asset in the world. Nevertheless, it is very important for firms to understand the risks of owning Bitcoin, as there are many different financial implications of doing so. 

Jonathan Gibson

Jonathan Gibson