- Microstrategy Inc. (Nasdaq: MSTR) recently disclosed a significant bitcoin acquisition.
- The firm purchased 18,300 bitcoins between August 6 and September 12 for a staggering $1.11 billion.
- Michael Saylor, the executive chairman, highlighted that the total bitcoin holdings by September 12 amounted to 244,800 bitcoins, with an average acquisition cost of $38,585 per bitcoin.
Microstrategy Inc. commits to an aggressive bitcoin investment strategy, adding 18,300 BTC to its portfolio in just over a month.
Details of Microstrategy’s Recent Bitcoin Purchase
From August 6 to September 12, 2024, Microstrategy Inc. made a substantial move by purchasing 18,300 bitcoins for roughly $1.11 billion. This acquisition is part of the company’s ongoing strategy to invest heavily in digital assets. The purchase price averaged around $60,408 per bitcoin, a significant investment reflecting the company’s confidence in the long-term value of cryptocurrency.
Financing Through Equity Sales
To finance this purchase, Microstrategy leveraged an agreement from August 1, allowing sales of up to $2 billion in shares through various financial institutions. By September 12, the company successfully raised approximately $1.11 billion by selling 8,048,449 shares, demonstrating its reliance on equity sales to fund its strategic acquisitions of digital currency.
Analyzing BTC Yield Performance
Microstrategy has been transparent about its performance metrics, notably highlighting its BTC Yield. For the quarter ending September 12, 2024, the company achieved a yield of 4.4%, and an impressive 17.0% for the year-to-date. The BTC Yield metric serves as an indicator of the company’s effectiveness in increasing shareholder value through its bitcoin investment strategy.
Limitations of BTC Yield Metric
While BTC Yield provides insight into the company’s performance, Microstrategy acknowledges its limitations. The metric does not account for liabilities or potential debt refinancing, which could impact the company’s financial health and overall strategic position. These factors are crucial for stakeholders to consider when evaluating the company’s bitcoin investment effectiveness and risks associated with such an aggressive acquisition strategy.
Conclusion
Microstrategy Inc.’s recent acquisition of 18,300 bitcoins underscores its unwavering commitment to integrating digital assets into its financial strategy. With a total holding of 244,800 bitcoins by mid-September 2024, the company continues to lead in the corporate adoption of cryptocurrency. While the BTC Yield shows promising returns, investors must remain cognizant of the inherent risks and limitations associated with this metric. Moving forward, Microstrategy’s strategy will be closely watched as a bellwether for corporate investment in digital currencies.
