MicroStrategy, a public business intelligence and software company, announced that it acquired approximately 18,300 bitcoins between August 6 and September 12. The company’s Form 8-K filed with the Securities and Exchange Commission (SEC) states that the purchase, valued at $1.11 billion, was executed at an average price of $60,408, including costs and fees.
The company, led by Michael Saylor, has continued to invest heavily in the largest cryptocurrency over the past four years after making its first purchase on August 11, 2020.
Increase in Bitcoin Investments
The recent acquisition has increased the total amount held to approximately 244,800 bitcoins, which is currently worth about $14.14 billion.
The average purchase price for MicroStrategy’s acquisitions since August 2020 is $38,585 per bitcoin, with a cumulative investment of about $9.45 billion.
MicroStrategy’s aggressive approach has sparked debate and praise among financial analysts over the years, but the company has not slowed its bitcoin acquisition.
Source of Funds
The funds used to purchase these latest 18,300 bitcoins were raised through the sale of the company’s shares, enabled through a sales agreement with several financial institutions on August 1.
According to the SEC filing, MicroStrategy raised approximately $1.11 billion by September 12 from the sale of a total of 8,048,449 shares under the sales agreement. The capital raised from the sale of these over eight million shares was directly allocated to investing in bitcoin and increasing the portfolio.
The company’s investment in bitcoin is extremely profitable
On August 10, MicroStrategy held 226,500 bitcoins, worth $13.77 billion, in reserves, acquired at an average price of $37,000 per bitcoin.
At that time, the price of bitcoin was approximately $60,500, and MicroStrategy had $5.39 billion in unrealized gains. Since August 2020, it has effectively outperformed the S&P 500 index.
The value of MicroStrategy’s stock has increased by about a thousand percent since August 2020, which is more than 16.25 times the return of the SPX during the same period.
