MicroStrategy Boosts Bitcoin Holdings, Driving Stock Price Higher
MicroStrategy has been making big waves in the world of finance with its recent purchase of $5.4 billion in Bitcoin. Using funds from a $3 billion convertible debt offering and $2.46 billion in new equity sales, the company acquired about 55,500 Bitcoin, marking its largest buy to date. This brings their total holdings to around 386,700 Bitcoin, a significant amount by any measure. These purchases took place between November 18 and November 24, and have been met with great interest from investors.
Despite this significant move, MicroStrategy’s stock is down slightly, currently trading at $4120.59. This dip is paralleled by a slight decrease in Bitcoin price, trading at roughly $96,178.03, down 0.9% in the last day. The iShares Bitcoin Trust, an exchange-traded fund tied to Bitcoin, is also down by 2.1%, currently at $55.30.
Investors seem upbeat about MicroStrategy’s assertive stance in the cryptocurrency market, as evidenced by the positive reception of their recent Bitcoin purchase, which exceeded the size of their recent convertible bond offering. The company swiftly executed these acquisitions right after closing the convertible deal last Friday. In total, MicroStrategy has invested approximately $12 billion in Bitcoin since October 31, with these investments being financed by equity sales through an at-the-market program involving nine securities firms, as well as the $3 billion convertible offering.
Based on the latest filings, MicroStrategy’s valuation stands at roughly $101 billion, considering its 230.5 million outstanding shares. When accounting for the company’s $7 billion debt and the value of its software business, it is estimated that the company is valued at around 2.7 times the worth of its Bitcoin holdings. In fact, MicroStrategy now owns almost 2% of the total 20 million Bitcoin in circulation, underlining its significant position in the market.
Since the November 5th election, MicroStrategy’s stock has been on a growth streak, having doubled in value compared to Bitcoin’s 40% rise during the same period. A key factor in this market movement was the optimistic response from Bitcoin investors to the election of cryptocurrency-friendly Donald Trump. It will be interesting to see how MicroStrategy’s significant Bitcoin investments shape its future performance in the market.
