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Summary
- MicroStrategy has bought 19,452 more Bitcoins for an average price of US$52,765 per Bitcoin, totalling to a whopping US$1 billion purchase.
- Now the company holds 90,531 Bitcoins with a current valuation of around US$4.5 billion (as of 26 February 2021).
- Since the company announced its first purchase of Bitcoin in August 2020, the stock has surged by over 900 per cent in a few months.
Recently, MicroStrategy, a Virginia based software company, announced that it has bought more Bitcoins worth a whopping US$1 billion, just a few days after closing another deal for the sale of convertible debt. The company has paid an average purchase price of US$52,765 per Bitcoin, which includes the transaction cost.
The total purchase of 19,452 Bitcoins bolstered the total Bitcoin holding with the company to 90,531. The company's first Bitcoin purchase was revealed in August 2020, for which it used existing cash in the books. Since then, MicroStrategy has raised debt two times via the offering of convertible debt. The company has garnered net proceeds of approximately US$1.03 billion from its recent debt raising.
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The company has raised cash via issuing zero-coupon convertible securities, which is in sync with its cash-raising strategy. The investors of these convertible notes would be getting a 50 per cent premium on MicroStrategy’s share price of US$955 (as of 16 February 2021).
The recent purchase price of US$52,765 might seem relatively high as Bitcoin had fallen below US$45,000 a day before the announcement. However, the company said that the average price for its total holdings of Bitcoin stands at US$23,985 per Bitcoin. In total, it has spent US$2.17 billion so far on Bitcoins. Based on the recent price of US$50,010, the total value of Bitcoin held by the company stands at US$4.52 billion (as of 26 February 2021).
Read More: Bitcoin Joins the Trillion Dollar Club, Surpasses Facebook’s Market Cap
Stock Performance
Since the company announced its first purchase of Bitcoin in August 2020, the stock has witnessed a sharp rally. On 10 August 2020, the stock closed at US$123.62 and surged to an all-time high of US$1,315 this month, delivering a return of over 900 per cent.
Some investors are also looking to increase their exposure to Bitcoin by investing in MicroStrategy.
