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MicroStrategy’s Bitcoin Bonanza: Over $14 Billion in Holdings as Company Raises $800 Million in Convertible Notes

Last Updated June 21, 2024 9:45 AM
Teuta Franjkovic
Last Updated June 21, 2024 9:45 AM

Key Takeaways

  • MicroStrategy announced plans to issue $500M in convertible senior notes to finance further acquisitions of Bitcoin.
  • The company has also recently acquired 11,931 Bitcoin for $786 million, bringing its total holdings to 226,331 Bitcoin.
  • Michael Saylor has publicly endorsed the cryptocurrency vision of presidential election candidate Donald Trump.
  • Saylor has also agreed to pay $40 million to settle a lawsuit accusing him of defrauding the city of Washington, D.C., of millions in taxes.

The rising prominence of Bitcoin, the world’s leading cryptocurrency, has attracted numerous financial institutions eager to tap into the expanding market. A prime example is MicroStrategy, known for its vigorous strategy of accumulating Bitcoin over recent years.

The company has continued its pattern of acquisitions with yet another substantial purchase of the digital asset.

On Thursday, June 20, 2024, MicroStrategy Chairman Michael Saylor announced  the company’s latest acquisition of 11,931 Bitcoins, continuing its strategy to expand its Bitcoin holdings.

MSTR Bolsters BTC Portfolio with $786M Purchase, Holdings Surpass 1% of BTC Supply

Valued at around $786 million at the time of purchase, this latest acquisition of 11,931 Bitcoins adds significantly to MicroStrategy’s substantial existing collection. With this addition, the company’s total Bitcoin holdings now stand at 226,331, building on their previous stash of 214,400 Bitcoins, valued at over $14 billion, making it the largest public-listed holder of Bitcoin. The company started accumulating the leading cryptocurrency in 2020, adopting it as a primary reserve asset.

Purchased at an average price of about $65,914 per Bitcoin, this acquisition of 11,931 Bitcoins follows closely on the heels of another significant buy — 9,245 Bitcoins between March 11 and March 18. With these purchases, MicroStrategy’s total Bitcoin holdings now exceed 1% of the entire BTC supply.

These moves are in line with the firm’s recent statements about its intention to continue expanding its investments in the leading cryptocurrency.

Announcing $500M Convertible Note Offering to Buy More Bitcoin

On June 13, 2024, the pro-Bitcoin firm announced  plans to issue $500 million in convertible senior notes. This move was aimed at raising funds to finance further acquisitions of assets.

The convertible senior notes, set to mature in 2032, will be offered privately to institutional investors who meet certain criteria, including those classified as ‘qualified institutional buyers’ under Rule 144A of the Securities Act of 1933. This offering is subject to market conditions and other considerations.

According to  the company:

“The notes will be unsecured, senior obligations of MicroStrategy and will bear interest payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024. The notes will mature on June 15, 2032, unless earlier repurchased, redeemed or converted in accordance with their terms.”

MicroStrategy highlighted that the proceeds from the sale of the convertible senior notes will be used to further expand its Bitcoin treasury by acquiring additional BTC, in addition to funding general corporate purposes.

Saylor Endorses Trump’s Crypto Vision Amid $40M Tax Settlement

MicroStrategy Chairman Michael Saylor publicly endorsed  the cryptocurrency vision of presidential election candidate Donald Trump.

It’s noteworthy that alongside endorsing Trump’s cryptocurrency vision, MicroStrategy Chairman Michael Saylor has agreed to pay  $40 million to settle a lawsuit. This legal action, initiated by the D.C. attorney general, accused him of defrauding the city of millions in taxes by falsely claiming residency in Virginia or Florida, as detailed in the agreement.

Under the settlement agreement, both Michael Saylor and MicroStrategy, the business software company he founded in 1989, deny any violation of District law and do not admit to any wrongdoing.

In a statement  released on Monday, Saylor explained that he relocated to Florida in 2012, making Miami Beach his home. He stated;

“I continue to dispute the allegation that I was ever a resident of the District of Columbia. I have agreed to settle this matter to avoid the continued burdens of the litigation on friends, family, and myself.”

MicroStrategy clarified that the tax issue was a personal matter concerning Michael Saylor, emphasizing that the company was not involved in managing his daily affairs or overseeing his individual tax responsibilities. The company also noted that under a separate agreement between MicroStrategy and Saylor, he would pay the full settlement amount to the District.

In the legal proceedings, attorneys from the attorney general’s office contended that Saylor resided in a 7,000-square-foot penthouse on the Georgetown waterfront or on yachts docked in the Potomac River. Despite this, they pointed out that from 2005 through 2021, he did not pay any income tax to the city.

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