Saylor’s MicroStrategy plans $750M stock sale, possibly buying more Bitcoin

Saylor’s MicroStrategy plans 0M stock sale, possibly buying more Bitcoin

MicroStrategy, one of the largest corporate holders of Bitcoin, said proceeds of the sale could be used to buy up even more Bitcoin.

United States-based software development company MicroStrategy is planning to raise up to $750 million via a stock sale and says it may use the proceeds to buy more Bitcoin (BTC).

In a filing to the Securities and Exchange Commission on Aug. 1, MicroStrategy announced it has entered into a sales agreement with three companies — Cowen and Company Canaccord Genuity and Berenberg Capital — relating to the sale of its class A common stock.

MicroStrategy said the proceeds of the proposed sale could be used for a variety of general corporate purposes, such as the acquisition of more Bitcoin and working capital.

King Kookbabbler's old company #MicroStrategy has filed notice with the SEC that it wants to dump up to $750 million in $MSTR on the market... in addition to the $335 million they just dumped on the market.

they use the money to buy bitcoins@crypto1nfern0 h/t @eliasbar9 https://t.co/zxSNIIu9Q7 pic.twitter.com/fvGgq1uY5V
— ⚯ M Cryptadamus ⚯ | @cryptadamist@universeodon.com (@Cryptadamist) August 1, 2023

“As with prior programs, we may use the proceeds for general corporate purposes, which include the purchase of Bitcoin as well as the repurchase or repayment of our outstanding debt,” said MicroStrategy CFO Andrew Kang during a second-quarter earnings call.

The Michael-Saylor-founded firm currently holds 152,800 Bitcoin, worth $4.5 billion at current prices. It added 12,333 Bitcoin in the second quarter and another 467 in July.

“Our objective is to find ways to generate incremental bitcoin for our shareholders and do that with either cash flow from the business or do it through intelligent accretive financings of equity or debt or other intelligent operations,” said MicroStrategy chairman Michael Saylor to investors on Aug. 1.

The price of Bitcoin rose nearly 2% immediately following the announcement, climbing from $29,200 to $29,771 at the time of writing.

*Bitcoin price over the last three months. Source: Cointelegraph Markets Pro*

Shares in MicroStrategy have benefited significantly from the ongoing Bitcoin rally, having now risen nearly 200% since the start of this year. MSTR shares surged from $145.02 per share on Jan. 3 to $434.98 at the time of publication, according to data from Google Finance.

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Michael Saylor-founded MicroStrategy disclosed it now holds 152,800 Bitcoin as of July 30, and is back in the black.

Business intelligence firm MicroStrategy — one of the largest corporate holders of Bitcoin (BTC) in the United States — managed to return to profitability in the second quarter amid a surge in the price of Bitcoin.

In a Q2 earnings results filing posted on Aug. 1, MicroStrategy reported $22.2 million in net income, a massive swing from a net loss of $1.1 billion in the prior-year period. Total revenues were mostly flat at $120.4 million.

In July, @MicroStrategy acquired an additional 467 BTC for $14.4 million and now holds 152,800 BTC. Please join us at 5pm ET as we discuss our Q2 2023 financial results and answer questions about the outlook for #BusinessIntelligence and #Bitcoin. $MSTR https://t.co/SCHeBJ80TH
— Michael Saylor⚡️ (@saylor) August 1, 2023

Much of the swing was due to a comparatively smaller digital asset impairment loss of $24.1 million in the quarter, compared to a whopping $917.8 million in Q2 2022.

In MicroStrategy’s case, digital asset impairment occurs when the market price of Bitcoin falls below the price at which the Bitcoin was acquired.

The price of Bitcoin hovered between $25,000 and $30,700 in the second quarter, with a notable rally in mid-June after several new spot Bitcoin exchange-traded funds were filed to the Securities and Exchange Commission.

“Our bitcoin holdings increased to 152,800 bitcoins as of July 31, 2023, with the addition in the second quarter of 12,333 bitcoins being the largest increase in a single quarter since Q2 2021,” said MicroStrategy CFO Andrew Kang.

Kang said it used cash from operations to add more Bitcoin to its balance sheet, and did so against the “promising backdrop” of institutional interest, accounting transparency and increasing regulatory clarity for Bitcoin.

In a June 13 interview with Bloomberg, MicroStrategy chairman Michael Saylor said he believes recent enforcement actions from the Securities and Exchange Commission would eventually play out in favor of Bitcoin — the only crypto excluded from being a security by SEC Chair Gary Gensler.

#Bitcoin is clarity in a sea of Crypto chaos. pic.twitter.com/4MMpZS3Bd0
— Michael Saylor⚡️ (@saylor) August 1, 2023

The company acquired 12,333 Bitcoin for $347 million in the quarter. As of July 30, the firm bought another 467 BTC, meaning its total Bitcoin balance is worth $4.5 billion at current prices.

In a separate filing to the SEC, also filed on Aug. 1, the company revealed it is also planning to sell up to $750 million in stocks for the acquisition of Bitcoin and other general corporate purposes.

The price of Bitcoin has continued to creep upwards over 2023, surging 79% since the start of the year. It is currently trading at $29,206.80, according to Google Finance.

MicroStrategy’s share price has also witnessed a resurgence per Google Finance, starting at $145.02 per share on Jan. 3, and rising nearly 200% to $434.98 at the time of writing.

In July, analysts from New York-based investment firm Berenberg Capital posted a bullish outlook for MicroStrategy, noting that the upcoming Bitcoin halving rally could see its shares gain significantly in price.

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mstr earnings