MicroStrategy buys $1.1 billion in Bitcoin amid market volatility

MicroStrategy acquired approximately 18,300 Bitcoin for $1.1 billion between Aug. 6 and Sept. 12 at an average price of $60,408 per BTC, according to a Sept. 13 filing with the US Securities and Exchange Commission (SEC).

Coinflip data shows the company’s latest purchase already has a paper loss of $2.2 million due to the top digital asset’s current volatility.

Funding

The firm stated that the purchase was funded by selling more than 8 million company shares via a sales agreement with several financial institutions, including TD Securities, The Benchmark Company, BTIG, Canaccord Genuity, Maxim Group, and SG Americas Securities.

The capital raised from these sales was directly used to expand its Bitcoin holdings.

Notably, the firm has pursued this funding strategy aggressively during the past year to accumulate the top digital asset. K33 Research stated that the firm has bought around 91,000 BTC between Sept. 2023 and today.

It added:

“August 2020-21 is the only period featuring a higher YoY growth in MSTR’s BTC exposure of 105,090 BTC.”

Meanwhile, this latest acquisition brought MicroStrategy’s total Bitcoin holdings to 244,800 BTC, valued at over $14 billion at current prices. The company’s total investment in Bitcoin is $9.45 billion, with an average purchase price of $38,585 per Bitcoin.

Saylortracker data indicates the firm holds an unrealized profit of more than $4 billion.

Bitcoin yield

MicroStrategy Executive Chairman Michael Saylor reported a Bitcoin yield of 4.4% for this quarter and 17% year-to-date on its holdings.

According to the SEC filing, this key performance indicator (KPI) helps assess the firm’s strategy for acquiring Bitcoin. The BTC yield metric tracks the percentage change over time in the ratio of MicroStrategy Bitcoin holdings to diluted shares.

The company believes this measure can enhance investors’ understanding of its decision to fund Bitcoin purchases through issuing additional shares or convertible instruments.

Despite news of the latest purchase, MicroStrategy’s shares remain flat in premarket trading. However, it has risen 91% year-to-date.

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