Reported by Cointelegraph: MicroStrategy’s $1.11 billion Bitcoin purchase was funded by selling over 8 million company shares through a sales agreement.
MicroStrategy, a publicly traded business intelligence and software company, has announced that it acquired approximately 18,300 Bitcoin between Aug. 6 and Sept. 12.
The company’s Form 8-K to the United States Securities and Exchange Commission states that the purchase, worth $1.11 billion, was made at an average price of $60,408 per Bitcoin, including expenses and fees.
The firm, led by CEO Michael Saylor, has continued to expand its holdings of BTC over the past four years after making its first purchase on Aug. 11, 2020.
Bitcoin holding growth
The company’s recent acquisition increased its BTC holdings to approximately 244,800 BTC, currently worth around $14.14 billion.
The average purchase price for MicroStrategy’s BTC purchases since August 2020 is $38,585 per BTC, with a cumulative investment of around $9.45 billion.
MicroStrategy’s aggressive approach has sparked both debate and praise from financial analysts over the years, but the firm has not slowed its acquisition of BTC.
Source of funds for the BTC purchase
The funds used to purchase this latest 18,300 BTC were raised through selling its company shares, enabled through a sales agreement with several financial institutions on Aug. 1.
According to the SEC filing, MicroStrategy had raised approximately $1.11 billion by Sept. 12 from selling “an aggregate of 8,048,449 Shares under the Sales Agreement.”
The capital raised from the sale of these over 8 million shares was directly allocated to expanding the firm’s BTC holdings and increasing the size of its portfolio.
MicroStrategy’s investment pays off
On Aug. 10, MicroStrategy held 226,500 BTC, worth $13.77 billion, in reserves, acquired at an average price of $37,000 per BTC.
At the time, BTC’s price was approximately $60,500, and MicroStrategy had $5.39 billion in unrealized profits. Since August 2020, it has effectively outperformed the S&P 500 index.
The value of MicroStrategy’s stock rose by around 1,000% since August 2020, equating to over 16.25x the returns of the SPX over the same period.