MicroStrategy wants to buy $500 million in Bitcoin

MicroStrategy wants to buy $500 million in Bitcoin
MicroStrategy wants to buy $500 million in Bitcoin

The listed MicroStrategy is the largest corporate investor on the market with 129,000 Bitcoin. Months after CEO Michael Saylor stepped down and one week after he and the company were charged with tax fraud, MicroStrategy is looking to buy more Bitcoin.

$500 million in shares for sale

A prospectus filed with the SEC on Friday states that MicroStrategy has an agreement with investment bank Cowen & Co. to sell his shares for $500 million. “We can use the proceeds from this sale to buy more Bitcoin,” the document reads. MicroStrategy warns of Bitcoin’s volatility, which dropped the currency below $20,000 this week.

“Future Bitcoin fluctuations may result in us having to convert the Bitcoin purchased with these funds back into cash, below the value of this offering,” MicroStrategy said of the risks. Under Saylor’s leadership, MicroStrategy has managed to put 129,699 Bitcoin on its balance sheet. At the time of writing, that war stock is worth about $2.7 billion.

Loss of $917.8 million

Last month, MicroStrategy reported a non-cash write-off of $917.8 million on Bitcoin. In the United States, companies are required to write off their Bitcoin stock if the price falls below book value. Interestingly, a profit may only be included if the Bitcoin has actually been sold. Even if MicroStrategy had bought the Bitcoin for $1,000 each, they would not have been allowed to write a profit at this point. Bitcoin was still worth $1,000 in the books, despite the fact that the price is currently at $21,500.

In its prospectus filed on Friday, MicroStrategy also writes that it does not intend to actively trade or play with derivatives. It does admit that Bitcoin may have to be sold if the company needs cash to survive. “We don’t have a specific amount of Bitcoin in mind as an acquisition target. We will continue to monitor market conditions to determine if it is a good time to buy more Bitcoin through debt or equity sales,” it concluded.

The article is in Dutch

Tags: MicroStrategy buy million Bitcoin

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