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MicroStrategy Buys Bitcoin for $ 489 Million

Overview:

  • MicroStrategy Increases Its Bitcoin Holdings by 13,005 BTC
  • In total, the company owns BTC worth almost $ 3 billion
  • Apparently still not the end of investment plans

MicroStrategy has caused quite a stir in the past with its billion-dollar Bitcoin (BTC) investments. Just recently, it became known that the American software company wanted to buy more BTC through a $ 500 million bond. This plan was now probably put into action, because the company led by Michael Saylor bought 13.005 BTC after. In total, this investment has a volume of the equivalent of 489 million US dollars. In the course of the transaction, further interesting details were disclosed.

MicroStrategy Now Owns over 100,000 BTC

Without having said it publicly, it may have been a goal of Michael Saylor and his company to cross the magic limit of 100,000 BTC. As it has now become known, the software giant bought another 13.0005 BTC, thus achieving this goal. The investment was made at a time when Bitcoin is in a difficult market situation. The Nasdaq – listed company has been speculating for some time on a rise in the value of the largest cryptocurrency by market capitalization.

MicroStrategy’s wallets currently contain BTC with a total value of around $ 2.75 billion. The company, based in Tysons Corner, Virginia, is by far the # 1 listed company investing in BTC. Tesla, ranked 2nd in this list, doesn’t even own half as many BTC. With Square Inc, another well-known company is in 5th place with just over 8,000 BTC. By its own admission, MicroStrategy paid an average price of $ 37,617 per BTC. The news could not have a positive influence on the price, because the Bitcoin is currently trading well below the mentioned average price.

What are Michael Saylor’s plans and is there a contingency plan?

In mid-June, the group issued corporate bonds worth $ 400 million. Due to an immense rush, the offer was increased to half a billion US dollars. The secured bonds are due in 2028 and attracted investors with an annual interest rate of 6.125 percent. Critics, such as the income strategist Marc Lichtenfeld of the Oxford Club, wonder whether MicroStrategy still has its own business or represents an alternative form of investment in the Bitcoin. Meanwhile, the company’s share price is closely linked to the course of bitcoin.

It also does not seem that the company is finished with its investment plans. Apparently, another billion-dollar transaction is imminent in the near future. As CEO Michael Saylor announced on Twitter, another billion US dollars is expected to flow into the BTC soon. To make this investment possible, the company intends to sell shares in the form of an “At the market”securities offering. By selling the ” Class A Common Stocks, “the company aims to raise money for” general corporate purposes, including the acquisition of Bitcoin.” Whether a part or the entire sum should flow into BTC, however, is still unclear.

It is questionable whether the company’s executives have a contingency plan should the Bitcoin collapse and a huge loss form for MicroStrategy. Immediately after the announcement of the recent acquisition of BTC, the company’s stock rose. Presumably, Michael Saylor will keep a large part of his planned share sales in the form of a “nest egg” to compensate for any losses. Understandably, the company did not publicly disclose an official strategy or insight into the investment plans.

Conclusion: MicroStrategy makes a risky bet with its investment strategy

Having issued corporate bonds in the triple-digit millions, MicroStrategy invests almost half a billion US dollars in Bitcoin. Without a doubt, the company is making a risky bet. Meanwhile, Michael Saylor has poured almost $ 3 billion of his company’s cash reserves into BTC.

If those responsible have made mistakes in their investment planning or the emergency plans do not work, an existential disaster threatens in the event of a Bitcoin crash. The fact is that Michael Saylor has been raising the company for many years, and in this case, too, he is likely to have played through all the scenarios. Nevertheless, the “all in Bitcoin” strategy is associated with unclear further development.

In the near future or in the distant future, we should have clarity as to whether the strategy chosen has been successful.

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