Microstrategy Considers Selling $1B In Stocks To Buy More BTC

Microstrategy considers selling $1B in stocks so it can buy more Bitcoin while the company already has the most of its treasury holdings in an alternative asset so let’s read more in our latest Bitcoin news today.

Microstrategy considers selling stocks and could be preparing to buy more BTC or about $1 billion to be exact. The cloud software company filed paperwork today with the Securities and Exchange Commission for a proposed public sale of Class A common stocks via an Open Market Sale Agreement and this type of agreement allows the company to sell stocks from time to time depending on the needs. The firm wrote in the filing:

“We intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin.”

MicroStrategy Launches “At the Market” Securities Offering for Flexibility to Sell Up to $1 billion of its Class A Common Stock Over Time $MSTRhttps://t.co/qouK8pFmBF

— Michael Saylor (@saylor) June 14, 2021

Microstrategy doesn’t definitely say it will use the proceeds to buy more BTC that’s been the company’s modus operandi since CEO Michael Saylor caught the BTC bug a year ago. The company owns about $3.7 billion in BTC which accounts for most of its treasury. It sold $500 million in corporate debt last week so that it is able to add to the total. The risky strategy has caught the company flak and the forward-looking statements section in the SEC filing showing it’s well aware of that:

“The concentration of our bitcoin holdings enhances the risks inherent in our bitcoin acquisition strategy. Servicing our debt will require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness.”

Of course, each company faces risks but the company is living thorugh it and since buying the initial 21,454 BTC for $11,653 for a piece in August with the price of the cryptocurrency made huge spikes up and down and even hit $63,498 before freefalling to less than $31,500 in June. The price is now hovering around $40K according to Nomics making the Microstrategy’s purchase a steal. It warns any fresh round of volatility for BTC will push the price of the stocks which is a correlated asset but makes it difficult for the company to cash out:

“Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.”