MicroStrategy Deepens Bitcoin Bet with Latest $204 Million Acquisition
Bitcoin corporate giant MicroStrategy has once again demonstrated its unwavering commitment to its digital asset strategy, announcing a significant new acquisition. According to an 8-K filing submitted to the U.S. Securities and Exchange Commission (SEC) on Monday, the company spent approximately $204.1 million between February 23 and March 1 to purchase an additional 3,015 Bitcoins (BTC) at an average price of $67,700 per coin.
Dominating the Digital Frontier: Over 3.4% of Total Bitcoin Supply Now Held
Michael Saylor, MicroStrategy’s co-founder and executive chairman, confirmed that this latest acquisition boosts the company’s total Bitcoin holdings to an impressive 720,737 BTC. Considering Bitcoin’s capped supply of 21 million coins, MicroStrategy now commands over 3.4% of the entire network’s circulating supply, solidifying its position as the largest corporate holder of Bitcoin.
Navigating Unrealized Losses Amid Relentless Accumulation
Despite its aggressive accumulation, MicroStrategy’s current average cost basis for its substantial Bitcoin portfolio stands at approximately $75,985 per BTC. With a total investment of $54.8 billion, the portfolio’s present market value of around $47.5 billion indicates a significant unrealized loss of $7.3 billion. Yet, this substantial paper loss has not deterred the company’s unwavering commitment to its Bitcoin-first strategy, as evidenced by its continued buying spree.
Strategic Funding Through Dynamic Equity Offerings
The capital for MicroStrategy’s recent Bitcoin purchases was primarily generated through its “at-the-market” (ATM) offerings of Class A common stock (MSTR) and perpetual preferred stock (STRC).
- In the past week, MicroStrategy successfully monetized approximately $229.9 million by selling 1,730,563 shares of MSTR. As of March 1, the company reported an impressive $7.6 billion in remaining MSTR stock available for sale under this offering program.
- Concurrently, MicroStrategy also sold 71,590 shares of STRC, generating approximately $7.1 million. A substantial $3.5 billion in STRC offering capacity remains available.
Analyst Endorsement Highlights STRC’s Strategic Importance
Wall Street brokerage Benchmark’s analyst, Mark Palmer, highlighted last week that STRC has emerged as MicroStrategy’s “main engine” for accumulating Bitcoin. He underscored the instrument’s effectiveness in accelerating the increase of MicroStrategy’s “implied Bitcoin per share.”
Palmer not only reiterated a “Buy” rating for MicroStrategy but also set an ambitious target price of $705, suggesting a potential upside of up to 444% for the stock.
STRC Stabilizes with Enhanced Dividend Yield
Following a challenging February for the cryptocurrency market, during which STRC’s share price briefly dipped to $90, it has since rebounded to its par value of $100. To further reassure investors and stimulate buying interest, MicroStrategy recently increased STRC’s annualized dividend yield by 25 basis points, bringing it to an attractive 11.5%.
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