MicroStrategy Wants to Sell $750 Million in Stock to Buy Bitcoin

In a filing with the U.S. Securities and Exchange Commission (SEC), MicroStrategy announced that it has entered into a purchase agreement with three companies, including Cowen, Canaccord Genuity and Berenberg Capital, regarding the sale of Class A common stock.

MicroStrategy CFO Andrew Kang said the proceeds from the stock sale could be used for a variety of general corporate purposes, such as buying more Bitcoin.

MicroStrategy Chairman Michael Saylor Says Company's Goal Is to Accumulate as Much Bitcoin as Possible

Amid declining software revenue, MicroStrategy Chairman Michael Saylor began buying Bitcoin in 2020 to reduce the amount of cash the company held due to inflation concerns. A year ago, Saylor stepped down as CEO to focus on the company's Bitcoin buying strategy.

The company purchased 12,333 Bitcoins for $347 million in Q2 2023. In July, it purchased another 467 BTC, bringing its total holdings to 152,800 Bitcoins, now worth $4.5 billion. MicroStrategy's stock has risen nearly 200% since the beginning of the year, helped by Bitcoin's rally. The company reported revenue of $242 million in the first half of 2023, compared to $241 million in 2021.

According to Coindesk , although this strategy is bringing success to the company, it also has many risks. Bitcoin's volatility can easily affect MicroStrategy's financial situation, in addition, depending on this digital currency makes the company vulnerable to tightening regulations or unforeseen events in the market.

MicroStrategy’s move to buy more Bitcoin could draw regulatory scrutiny. With exchanges under siege from governments around the world, new regulations could hamper MicroStrategy’s ability to buy and sell Bitcoin.

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