MicroStrategy’s Bitcoin Buying Spree Continues: Acquires 6,455 BTC For $150M

MicroStrategy, a leading business intelligence firm, disclosed on March 27th, 2023, that it had acquired about 6,455 Bitcoins for roughly $150.0 million in cash, according to the SEC filing.

The acquisition was made between February 16th and March 23rd this year at an average price of approximately $23,238 per BTC, including fees and expenses.

As of March 23rd, MicroStrategy and its subsidiaries owned nearly 138,955 BTC, the total purchase cost was approximately $4.14 billion, and the average price per Bitcoin, including all fees and expenses, was around $29,817. 

This recent acquisition of Bitcoin is in line with MicroStrategy’s ongoing investment strategy, which focuses on using cryptocurrency to store value.

MicroStrategy’s investment in Bitcoin has been a subject of conversation in the financial sector for a while. The company made this move to safeguard against inflation by investing in digital assets. Michael Saylor, the CEO of MicroStrategy, has expressed his opinion that Bitcoin is a better asset to store value than conventional options like gold.

MicroStrategy revealed that, apart from acquiring bitcoins, it has also sold a total of 1,348,855 shares of its Class A common stock. The sale was carried out following a sales agreement with Cowen and Company, LLC, and BTIG, LLC, who acted as sales agents.

This sales agreement empowers the company to issue and sell shares of its Class A common stock, amounting to a total offering price of up to $500.0 million, periodically through the agents.

MacroStrategy Repays $205M Loan With Bitcoin Collateral

Between January 1st and March 24th, MicroStrategy issued and sold an aggregate of 1,348,855 shares under the sales agreement for aggregate net proceeds to MicroStrategy, fewer sales commissions and expenses, of approximately $339.4 million. 

The net proceeds were used to fund MacroStrategy LLC’s prepayment of a $205.0 million term loan issued by Silvergate Bank.

MacroStrategy is a wholly-owned subsidiary of MicroStrategy and had collateralized the loan with certain bitcoin owned by the company and a $5.0 million cash reserve account held by MacroStrategy at Silvergate. 

MacroStrategy voluntarily prepaid Silvergate approximately $161.0 million on March 24th, 2023, in full repayment, satisfaction, and discharge of the loan and all other obligations under the credit agreement.

After receiving the full payment, Silvergate terminated the credit agreement and released its security interest in all of MacroStrategy’s assets that were being used as collateral, which included Bitcoin.

The prepayment was fully funded using proceeds from the sale of shares under the sales agreement and the $5.0 million in the cash reserve account held by MacroStrategy at Silvergate.

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