In recent days MicroStrategy filed an application with the SEC to sell up to $500 million in shares, with the intent to buy more Bitcoin.
MicroStrategy wants to buy more Bitcoin
MicroStrategy, the company that holds the largest amount of Bitcoin in the world, 122,478, has reportedly submitted an application to the SEC in recent days to sell about $500 million in shares to buy more BTC.
The shares will be sold through Cowen & Co. and BTIG LLC, according to guidance presented in the prospectus sent to the SEC on Friday by the enterprise software company. No specific date for any sales was provided. The company added that it intends to retain all future earnings, if any, to purchase additional Bitcoin and develop the software business.
But from what is evident in the memo addressed to the SEC and from how the company has behaved in recent months, it seems clear that this new liquidity could be used entirely to strengthen its Bitcoin holdings, perhaps by lowering the average of their holdings.
The company, which according to the latest balance sheet data, is reportedly losing about $1 billion, taking into account that it is holding Bitcoin bought at an average of $33,000, is therefore considering increasing its exposure even further, convinced that Bitcoin’s prices are evidently destined to rise.
In recent weeks, Michael Saylor resigned from his role as CEO within the company, which has passed to Chairman Phong Le. But the strategy pursued by Saylor, who has always been a huge supporter of Bitcoin, evidently does not seem to be changing.
The management of MicroStrategy’s new CEO and Saylor’s recent purchases
The new CEO himself had said that the company’s policy on Bitcoin would certainly not change, despite the fact that market conditions have deteriorated abruptly in recent months.
All this despite the fact that the large declines in Bitcoin’s share price in recent months have put MicroStrategy’s company even at risk of a margin call on a loan collateralized precisely by the cryptocurrency, which would be triggered if Bitcoin’s price fell below $21,000. This fact led to a 25% drop in the software company’s stock in just a few weeks.
Two days ago, in a tweet, Saylor reiterated that Bitcoin cannot be taken out, meaning that the declines of recent months are just a normal adjustment before the asset jumps again.
— Michael Saylor⚡️ (@saylor) September 8, 2022
In June, when Bitcoin’s price was around $20,000, the company bought another 480 Bitcoin, as announced via Twitter by Saylor:
MicroStrategy has purchased an additional 480 bitcoins for ~$10.0 million at an average price of ~$20,817 per #bitcoin. As of 6/28/22 @MicroStrategy holds ~129,699 bitcoins acquired for ~$3.98 billion at an average price of ~$30,664 per bitcoin. $MSTRhttps://t.co/leQYTXn817
— Michael Saylor⚡️ (@saylor) June 29, 2022
The former CEO of MicroStrategy has always expressed blind faith in Bitcoin, which he said he prefers to gold as a safe asset to invest in.
Saylor said during an interview:
“Bitcoin is digital ownership and the most cost-effective method we’ve ever discovered to convert energy into prosperity. Bitcoin is digital ownership and the most cost-effective method we’ve ever discovered to convert energy into prosperity.If I had picked gold instead when I bought #Bitcoin we would probably have about $250 million in gold. And our shareholders would have missed out on $4 or $5 billion.”
Recent allegations against Michael Saylor and MicroStrategy
In early September, Saylor and MicroStrategy faced charges from the US Attorney’s Office in Washington, DC, for tax fraud. The indictment alleges that while Saylor has been living and residing in the district for ten years, he allegedly never paid a penny in income taxes locally. The company would also be involved in the lawsuit on the grounds that it was aware of the matter but reported that its residence was, instead, in Florida.
NEW: Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.
— AG Karl A. Racine (@AGKarlRacine) August 31, 2022