MicroStrategy, a well-known business intelligence and software firm, recently announced that it acquired approximately 18,300 Bitcoins between August 6 and September 12, 2023.
The transaction, valued at $1.11 billion, was financed by selling over 8 million shares of the company under a sales agreement. According to the Form 8-K filed with the U.S. Securities and Exchange Commission (SEC), the average purchase price for the Bitcoins was $60,408 each, including related expenses and fees.
Led by CEO Michael Saylor, the company has consistently increased its BTC holdings over the past four years, following its initial purchase on August 11, 2020.
Growth in Bitcoin Holdings
This recent acquisition raised MicroStrategy's total Bitcoin holdings to approximately 244,800 BTC, currently valued at around $14.14 billion. The company has invested a total of around $9.45 billion in Bitcoin since August 2020, with an average purchase price of $38,585 per Bitcoin.
MicroStrategy's aggressive investment strategy has generated considerable debate among financial analysts, drawing both praise and criticism; however, the firm continues to pursue its Bitcoin acquisition strategy.
Funding Source for the Bitcoin Purchase
The funds for acquiring the latest 18,300 Bitcoins were raised through the sale of company shares, facilitated by an agreement with several financial institutions on August 1. According to the SEC filing, by September 12, MicroStrategy had raised approximately $1.11 billion from selling “an aggregate of 8,048,449 shares under the Sales Agreement.”
The capital generated from the sale of these shares was directly allocated to increasing the firm's Bitcoin holdings and expanding its investment portfolio.
MicroStrategy's Investment Yields Returns
As of August 10, MicroStrategy held 226,500 Bitcoins, valued at $13.77 billion, purchased at an average price of $37,000 per Bitcoin. At that time, Bitcoin's price was approximately $60,500, and MicroStrategy was sitting on unrealized profits of $5.39 billion.
Since August 2020, the company has performed better than the S&P 500 index, with the value of MicroStrategy’s stocks witnessing around a 1,000% increase—over 16.25 times the returns of the SPX during that same period.
