Micro Strategy Might Sell $1B in Stock After the Massive BTC Purchase

The company said that they intend to use the proceeds from the offering for corporate purposes. It will include the acquisition of Bitcoin.

At the same time, business intelligence company MicroStrategy announced it would use $489 million for a private offering sale to buy Bitcoin. As the company said, it might also sell around $1 billion of the stock for the same reason.

On Monday, during the Exchange Commission and U.S. Securities filing, MicroStrategy said it would launch a securities offering that would allow it to sell around $1 billion of its stock over time. The company said it intended to use the opportunity from the offering of general corporate purposes, including the acquisition of Bitcoin.

Bitcoin can not pay interest or various returns. Hence the ability to generate any return on investment from the proceeds from this offering might depend on appreciation in the value of Bitcoin. Future fluctuations in Bitcoin trading prices might result in converting Bitcoin that is purchased. The proceeds from this offer will go into cash with a discount substantially under the net proceeds from this offering.

Details on the purchase

According to the SEC filing, MicroStrategy held 92,078 Bitcoin, roughly $3.8 billion at the time of publication as of June 4. Today, the company announced it intended to purchase an additional $489 million in cryptocurrency. The filing showed that MicroStrategy bought its existing holdings at an average BTC price of $24,550. This means that the company saw the value of its crypto increase by almost $1.6 billion.

The firm might use the entirety of the $1 billion proceeds for investing in Bitcoin again. It should add roughly 25,050 coins to its coffers at the current value of $40,150. The price of the crypto asset has risen by more than 8.8% in the last 24 hours.