MicroStrategy, the business intelligence software company, has announced the acquisition of an additional 6,455 Bitcoins for approximately $150 million, according to a recent SEC filing. The acquisition was made between February 16 and March 23, 2023, at an average price of $23,238 per bitcoin, inclusive of fees and expenses.
MicroStrategy and its subsidiaries now hold an aggregate of approximately 138,955 Bitcoins, which were acquired at an aggregate purchase price of approximately $4.14 billion and an average purchase price of approximately $29,817 per bitcoin, inclusive of fees and expenses.
This latest acquisition comes just days after MicroStrategy’s wholly-owned subsidiary, MacroStrategy LLC, fully repaid its $205 million term loan to Silvergate Bank. The loan was collateralized by certain bitcoin owned by MacroStrategy and a $5 million cash reserve account held by MacroStrategy at Silvergate.
The loan had a scheduled maturity date of March 23, 2025, and bore interest at a floating rate equal to the SOFR 30 Day Average plus 3.70%, with a floor of 3.75%. As of March 24, 2023, the floating rate equaled 8.27%. Under the terms of the Credit Agreement, MacroStrategy was required to maintain a Loan to collateral value ratio of less than 50%. As of March 24, 2023, approximately 34,619 bitcoins were held in a collateral account established under the Loan.
MicroStrategy funded the prepayment of the loan with proceeds from the sale of shares of its class A common stock, which it issued and sold under a Sales Agreement with Cowen and Company, LLC and BTIG, LLC as sales agents. During the period between January 1, 2023, and March 24, 2023, MicroStrategy issued and sold an aggregate of 1,348,855 shares under the Sales Agreement for aggregate net proceeds to MicroStrategy of approximately $339.4 million.
MicroStrategy has been investing heavily in Bitcoin over the past few years, with the company seeing the cryptocurrency as a long-term store of value. MicroStrategy CEO Michael Saylor has been a vocal proponent of Bitcoin, and the company has made multiple Bitcoin purchases since its initial investment of $250 million in August 2020. The company’s Bitcoin holdings are now worth billions of dollars and represent a significant portion of the company’s overall balance sheet. With this latest acquisition, MicroStrategy has shown that it remains committed to its Bitcoin strategy and sees value in continuing to invest in cryptocurrency.
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