MicroStrategy to Sell $500 Million of Stock to Purchase More Bitcoin

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Key Takeaways

  • Cowen and BTIG are leading the stock offering.
  • The stock offering to be used for “general corporate purposes, including the acquisition of bitcoin.”

Leading business intelligence company MicroStrategy (MSTR) plans to sell up to $500 million of stock to fund more cryptocurrency purchases.

As per the U.S. Securities and Exchange Commission (SEC) filing, the Class A shares will be sold through Cowen & Co. and BTIG LLC- two of the most prominent investment banks that cover crypto-related stocks.

No specific date was provided for any potential sales yet. Under the terms of the sale agreement, MicroStrategy may sell shares in amounts and at times to be determined by the company from time to time.

MSTR pointed out that the stock offering will be for “general corporate purposes, including the acquisition of bitcoin.”

The company’s stock edged down 1% in Friday after-hours trading after it agreed to sell up to $500M in common shares in a new offering.

Microstrategy has always been very keen on purchasing huge amounts of cryptocurrency, especially Bitcoin.

Last month, MicroStrategy Inc. co-founder Michael Saylor gave up his chief executive officer(CEO) role and said he’ll focus more on Bitcoin after the enterprise-software maker reported a loss of over $1 billion related to the second-quarter plunge in the price of the Bitcoin.

On August 2, MicroStrategy’s revenue fell 2.6% year-on-year to $122.1 million in the three months ending June 30, while gross profit slid 5.2% to $96.9 million and net losses ballooned to $1.062 billion, of which $917.8 million was due to impairment charges on MicroStrategy’s vast BTC holdings.

MicroStrategy embarked on a BTC buying spree 2 years ago based on Saylor’s abrupt conversion to seeing BTC as the future of everything.

MicroStrategy has been under the media limelight more often in recent days. Recently, Saylor and MicroStrategy were sued by the District of Columbia for allegedly evading taxes on Saylor’s earnings in the district.

Following this lawsuit, MicroStrategy’s shares fell over 4%, Thursday as the analytics software company lost more ground in the wake of a lawsuit alleging tax evasion on the part of company Chairman Michael Saylor.

District of Columbia Attorney General Karl Racine said his office was suing MicroStrategy for “conspiring to help him [Saylor] evade taxes he legally owes on hundreds of millions of dollars he’s earned while living in D.C.”

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Saniya Raahath
Saniya Raahath

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