Digital Assets: MicroStrategy’s Bitcoin Binge Buying > $1B

December 21, 2020 | Digital Assets, Latest News, News

The company made good use of the recent correction, swooping to buy the dip.

MicroStrategy (NASDAQ: MSTR), the business intelligence firm led by bitcoin evangelist CEO Michael Saylor, announced this morning that it had bought about 29,646 additional bitcoins for about $650 million in cash. The average price works out to approximately $21,925 per bitcoin, all-inclusive of fees and expenses. (MicroStrategy)

MicroStrategy’s BTC stock scales the billion-dollar mark

The company confirmed that it now held about 70,470 bitcoins at an average price of $15,964 per bitcoin. That totals about $1.125 billion in holding cost.

The company also said that the price of bitcoin (Coinbase) as of midnight on December 21, 2020, was about $23,910 per bitcoin.

Saylor’s company is therefore sitting on a paper profit of about $560 million.

Store of value

“The Company continues to operate in accordance with its Treasury Reserve Policy and currently holds approximately 70,470 bitcoins,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.  “The acquisition of additional bitcoins announced today reaffirms our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value.  We believe the proactive management of our balance sheet, combined with the improved revenue and profitability performance of the Company, have been significant factors in the recent appreciation in our stock price.”

The stock has been on a tear, as shown in the chart below.

Meanwhile, the company assured investors that it expects to continue to generate positive operating income and free cash flow from its core business of business intelligence.

It said it would “continue to evaluate the use of excess cash in accordance with our capital allocation strategy and Treasury Reserve Policy.”

“The Company continues to believe bitcoin will provide the opportunity for better returns and preserve the value of our capital over time compared to holding cash.  We also remain dedicated to our customers and our goal of operating a growing profitable business intelligence company,” said Phong Le, President & CFO.

Microstrategy: It’s not only operating cash flow!

Microstrategy recently announced a sale of $400 million aggregate principal amount of convertible senior notes due 2025 in a private offering to qualified institutional buyers.

According to Coin Telegraph, the sale raised $650 million, which Saylor immediately deployed when the bitcoin price corrected.

Related Story:    MicroStrategy Borrowing $400M To Bump Up Bitcoin Bet

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