MicroStrategy plans to buy more Bitcoins by selling up to $500M of stock

While other crypto investors might have become increasingly concerned about the recent price movements of Bitcoin (BTC), MicroStrategy remains unperturbed as it vows to continue implementing its digital assets strategy. In fact, the company plans to raise capital by selling shares and using the proceeds to buy more BTCs.

MicroStrategy (MSTR), a Virginia-based software developer also known for owning the largest Bitcoin holdings among publicly traded firms, revealed its intention to sell up to $500 million of stock to fund its planned crypto purchase in a filing with the U.S. Securities and Exchange Commission. The company has tapped the services of Cowen and Company, LLC and BTIG, LLC to facilitate the transaction.

“We have entered into a Sales Agreement (the ‘Sales Agreement’) with Cowen and Company, LLC and BTIG, LLC (collectively, the ‘Agents’), dated September 9, 2022, relating to the sale of shares of our class A common stock, par value $0.001 per share, offered by this prospectus supplement,” MicroStrategy said. “In accordance with the terms of the Sales Agreement, under this prospectus supplement, we may offer and sell shares of our class A common stock having an aggregate offering price of up to $500,000,000 from time to time through one or more of the Agents, acting as our sales agents.”

Aside from growing its enterprise analytics software business, MicroStrategy’s other corporate strategy is to acquire and hold Bitcoin. “Our bitcoin acquisition strategy involves acquiring bitcoin with our liquid assets that exceed working capital requirements, and from time to time, subject to market conditions, issuing debt or equity securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase bitcoin,” the company reiterated in its latest filing.

It appears that BTC’s recent plunge below $20,000 has not deterred the company from pursuing its digital assets strategy. On September 7, Bitcoin plunged below $18,700 but the crypto eventually recovered starting September 9. At the time of writing, BTC traded at $22,175.29 based on Coinmarketcap data.

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