MicroStrategy bought another 10,107 BTC for $1.1B, offers stock

MicroStrategy, the top corporate holder of the world’s first cryptocurrency Bitcoin (BTC), just bought another 10,107 BTC for $1.1 billion.

MicroStrategy CEO Michael Saylor announced in a recent X post that this brings the firm’s holdings to 471,107 BTC acquired for $30.4 billion at an average price of $64.511 per Bitcoin. At the current price of Bitcoin these holdings are worth over $47 billion — an increase of nearly 55%.

This is not the only announcement that Saylor made today. In a separate X post, he also publicized MicroStrategy’s latest “convertible preferred stock offering available to institutional investors & select retail investors.” The announcement reads:

“MicroStrategy intends to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin and for working capital.”

The stocks in question will have a liquidation preference of $100 per share and accumulate dividends at a fixed rate that will be determined at the offering’s pricing. Holders will have the right to convert their shares into shares of MicroStrategy’s class A common stock” in certain circumstances and during specified periods, at the then-applicable conversion rate.

MicroStrategy is a publicly traded business intelligence company founded in 1989. In 2020, it pivoted to acquire as much Bitcoin as possible. The company now holds well over 1% of all Bitcoin that will ever exist and is well underway in its pursuit of 2%.

Recent reports indicated that MicroStrategy may have to pay taxes on its holdings despite never selling any. In accordance with the Inflation Reduction Act of 2022, MicroStrategy qualifies for a 15% tax rate based on the adjusted version of the company’s earnings.

This would likely force the company to sell a part of its very significant stake in Bitcoin, which could potentially lead to lower prices. Still, he United States Internal Revenue Service (IRS) may decide to create an exemption specifically for Bitcoin holdings under Trump’s administration as requested by MicroStrategy and U.S. crypto exchange Coinbase.

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