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MicroStrategy sells shares, buys more bitcoin

EditorNatashya Angelica
Published 02/12/2024, 16:22
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Investors are reminded that the information provided in the SEC filing is based on the company's press release statement and should be considered alongside other financial statements and disclosures for a complete understanding of the company's financial position.

For comprehensive analysis of MicroStrategy's financial health, which InvestingPro rates as "FAIR," including detailed metrics and expert insights, investors can access the full Pro Research Report, available exclusively to subscribers.

In the same period, MicroStrategy invested roughly $1.5 billion into acquiring approximately 15,400 bitcoins, averaging a purchase price of about $95,976 per bitcoin, inclusive of fees and expenses. This purchase was funded by the proceeds from the share sales.

As of Saturday, the company's total bitcoin holdings amounted to approximately 402,100 bitcoins, acquired at an aggregate price of nearly $23.4 billion, averaging $58,263 per bitcoin. The company operates with a moderate debt level, maintaining a debt-to-equity ratio of 1.13.

The company also disclosed an update on its BTC Yield, a key performance indicator (KPI) that measures the period-to-period percentage change in the ratio of the company’s bitcoin holdings to its Assumed Diluted Shares Outstanding. From the beginning of October to Saturday, the BTC Yield stood at 38.7%, and from the start of the year to the same date, it was 63.3%.

MicroStrategy uses the BTC Yield to assess the effectiveness of its strategy of acquiring bitcoin in a way that is believed to be beneficial to shareholders. Nevertheless, the company emphasizes that BTC Yield is not an operating performance measure or a financial or liquidity measure and should not be understood as such. It is not indicative of the trading price of the company's shares or an ownership interest in the bitcoins held by the company.

Investors are reminded that the information provided in the SEC filing is based on the company's press release statement and should be considered alongside other financial statements and disclosures for a complete understanding of the company's financial position.

In other recent news, MicroStrategy Incorporated has made significant strides in its Bitcoin investment strategy. Barclays (LON:BARC) and Benchmark have raised their price targets for MicroStrategy shares to $515 and $650, respectively, maintaining their positive ratings on the stock. This follows the company's announcement of acquiring approximately 51,780 Bitcoin for around $4.6 billion, bringing its total Bitcoin holdings to about 331,200.

MicroStrategy has also upsized its offering of 0% convertible senior notes due 2029 to $3 billion, resulting in net proceeds of approximately $2.97 billion. Moreover, the company sold over 5.5 million shares, generating nearly $2.46 billion in net proceeds. These funds have been utilized to acquire around 55,500 bitcoins, increasing the company's total holdings to approximately 386,700 bitcoins.

Analysts from Canaccord Genuity, BTIG, and Benchmark have maintained a Buy rating on the company's stock, reflecting the successful execution of MicroStrategy's Bitcoin-oriented strategy. Despite a shift to cloud services impacting software revenues, MicroStrategy's subscription services have grown, now accounting for 24% of total revenue.

Meanwhile, Susquehanna International highlighted an unusual situation with MicroStrategy's put options price dynamics, where a decrease in implied volatility led to a loss for put option holders despite the stock price falling. These recent developments underscore the company's ongoing strategic maneuvers in the cryptocurrency realm and its commitment to Bitcoin as a treasury reserve asset.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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