MicroStrategy’s $750M Stock Sale and Potential Bitcoin Investment

MicroStrategy Plans to Raise Funds for Bitcoin Purchase

United States-based software development company MicroStrategy is planning to raise up to $750 million through a stock sale and may use the proceeds to buy Bitcoin (BTC).

As stated in a filing to the Securities and Exchange Commission (SEC) on Aug. 1, MicroStrategy has entered into a sales agreement with Cowen and Company Canaccord Genuity and Berenberg Capital for the sale of its class A common stock.

MicroStrategy stated that the proceeds of the proposed sale could be used for a variety of general corporate purposes, such as the acquisition of more Bitcoin, repurchase or repayment of outstanding debt, and working capital.

“As with prior programs, we may use the proceeds for general corporate purposes, which include the purchase of Bitcoin as well as the repurchase or repayment of our outstanding debt,” said MicroStrategy CFO Andrew Kang during a second-quarter earnings call.

MicroStrategy’s Bitcoin Investment

The firm founded by Michael Saylor currently holds 152,800 Bitcoin, worth $4.5 billion at current prices. The second quarter saw an addition of 12,333 Bitcoin, followed by another 467 in July.

“We are looking for ways to increase the Bitcoin holdings of our shareholders, and this can be done through cash flow from operations, or through intelligent, accretive financings of equity or debt,” said Michael Saylor, Chairman of MicroStrategy, to investors on Aug. 1.

The price of Bitcoin rose almost 2% after the announcement, going from $29,200 to $29,771 at the time of writing.

Shares in MicroStrategy have seen a huge benefit from the Bitcoin rally, having risen nearly 200% since the start of this year. MSTR shares have gone from $145.02 per share on Jan. 3 to $434.98 at the time of publication, according to Google Finance.