News
MicroStrategy’s $786 million Bitcoin purchase sees shares rise 3%
MicroStrategy I bought almost 12,000 of them Bitcoin for $786 million, according to a June 20 report archiving with the United States Securities and Exchange Commission (SEC).
Following the news, the company’s shares rose 3% in premarket trading to $1,507, according to Google Finance. data.
Buying Bitcoin
The document stated:
“MicroStrategy acquired approximately 11,931 bitcoins for approximately $786.0 million in cash, using proceeds from the offering and excess liquidity (set forth in our Quarterly Report on Form 10-Q for the three months ended March 31 2024), at an average price of approximately $65,883 per bitcoin, including fees and expenses.”
With this latest acquisition, the company’s Bitcoin holdings have risen to 226,631 BTC. These were acquired at a total purchase cost of approximately $8.3 billion, averaging approximately $36,798 per BTC. Based on current prices of $65,990, the current market value of these holdings is over $15 billion.
Notably, the company recently completed an $800 million debt offering with a 2.25% coupon and 35% conversion premium. This strategy has helped the company since the beginning of the year raise over $2 billion for Bitcoin purchases.
However, despite issuing more shares, which typically dilutes the value of the shares, CryptoSlate Insight reported that the value of the company’s Bitcoin shares increased. This increase means that each share now represents more Bitcoin value, benefiting shareholders.
That of MicroStrategy Bitcoin holdings per share they rose to 0.013163 BTC, with 17,194,000 outstanding shares and a total of 226,331 BTC held.
MicroStrategy earnings per share
BTC at $1 million
Meanwhile, analysts at Bernstein have significantly increased their projections for the price of Bitcoin, predicting that the flagship digital asset will reach $1 million by 2033 and $200,000 by the end of 2025.
This optimistic outlook is based on the growing demand for major cryptocurrencies and limited supply. Analysts pointed out that newly launched Bitcoin spot ETFs and several institutions have started incorporating BTC into their treasuries.
They also noted that the digital asset could receive approval from major brokerage houses and large private banking platforms before the end of the year, which would spur institutional-based trading strategies that would further strengthen its adoption.