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MicroStrategy issues new stock to buy Bitcoin again, holding 158,000 Bitcoins surpassing similar ETFs.

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MicroStrategy issues new stock to buy Bitcoin again, holding 158,000 Bitcoins surpassing similar ETFs.

Publicly traded company MicroStrategy, whose main business is holding Bitcoin, has once again increased its Bitcoin holdings. Between August 1, 2023, and September 24, 2023, MicroStrategy and its subsidiaries purchased approximately 5,445 Bitcoins for about $147.3 million in cash, at an average cost of $27,053 per Bitcoin. As of September 24, 2023, MicroStrategy holds approximately 158,245 Bitcoins, with a total acquisition cost of $4.68 billion and an average cost of $29,582 per Bitcoin.

MicroStrategy Issues New Shares to Buy Bitcoin

MicroStrategy signed sales agreements with Cowen and Company, LLC, Canaccord Genuity LLC, and Berenberg Capital Markets LLC in early August, allowing the company to issue up to $750 million in Class A common stock. The proceeds from the issuance are said to be used for general corporate purposes, including the purchase of Bitcoin, working capital, and potentially for share buybacks or debt repayments depending on market conditions.

As of September 24, 2023, MicroStrategy has issued and sold a total of 403,362 shares under the sales agreements, with a net profit of approximately $147.3 million received by MicroStrategy after deducting sales commissions. It appears that all the proceeds have been used to purchase Bitcoin, and the company still has an additional issuance capacity of $600 million.

Holding Bitcoin Surpasses All ETFs

Crypto data website CoinGecko recently compiled a list of the top 12 Bitcoin spot and futures ETFs globally. The ProShares Bitcoin Strategy ETF BITO, ranked first, holds Bitcoin futures contracts equivalent to 35,890 Bitcoins.

Compared to MicroStrategy's 158,245 Bitcoins, the size of these ETFs seems insignificant. MicroStrategy, whose core business is business intelligence, appears to be more focused on its secondary business of holding Bitcoin. With the implementation of the fair value accounting standard by the Financial Accounting Standards Board (FASB), we look forward to MicroStrategy's third-quarter financial report to see if the increase in Bitcoin market valuation can lead to a more impressive performance in its financials and stock price. MicroStrategy's stock closed at $327.6 yesterday, up 124.89% year-to-date, while Bitcoin has only risen by 58.98% during the same period.

Shareholders benefit from the new FASB regulations as MicroStrategy's stock price rises.