MicroStrategy Inc. Chairman Makes $593.3 Million Bitcoin Bet
MicroStrategy Inc. chairman and co-founder Michael Saylor has made one of his largest bets yet, as the enterprise-software maker turned Bitcoin investment-fund proxy purchased $593.3 million more of the largest cryptocurrency.
Biggest Bitcoin Purchase Yet
The Tysons Corner, Virginia-based firm revealed in a filing on Thursday that it had bought 16,130 Bitcoin in November, raising its holdings to roughly $6.5 billion. This purchase marks the company’s biggest buy since it purchased 19,452 Bitcoin for just over $1 billion in February 2021.
Saylor’s Bitcoin Strategy
Saylor began buying Bitcoin in 2020, and has increased his purchases this year as the cryptocurrency recovered from a year of losses caused by rising rates and some high-profile crypto implosions and bankruptcies. Saylor stepped down from the chief executive role a year ago, stating that he would focus on the Bitcoin aspect of the company’s now dual strategy.
Investor Optimism
MicroStrategy’s shares have surged 250% this year, outperforming Bitcoin which rallied more than 125%. There is optimism that the US may soon approve an exchange-traded fund that invests directly in the cryptocurrency. This has helped allay concerns that an ETF will diminish demand for the stock.
Market Analyst Perspective
According to Matthew J. Maley, chief market strategist at Miller Tabak + Co., “If/when we get a Bitcoin ETF, it will raise the interest in the asset class. There shouldn’t be a lot of cannibalization.”
Stock Offering and Plans
MicroStrategy also entered into an agreement with Cowen and Company, Canaccord Genuity and BTIG to offer up to $750 million of common stock. The company initially announced plans to raise the amount through share sales in August, saying proceeds would be used for purposes such as Bitcoin purchases, working capital, and the repurchase of debt.
Future Prospects
With the purchase of $593.3 million more of Bitcoin in November, MicroStrategy Inc. is solidifying its position as a major player in the cryptocurrency market. The company’s bullish outlook on Bitcoin is demonstrated not just through its purchases, but also through its plans to raise additional funds for further investments in the digital asset.
–With assistance from Tom Contiliano.
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