MicroStrategy Acquires 55,500 BTC for $5.4 Billion

MicroStrategy has acquired an additional 55,500 Bitcoin for $5.4 billion at an average price of approximately $97,862 per Bitcoin, while also reporting substantial updates on their financial operations as of November 25, 2024.

Key Points

• MicroStrategy’s total Bitcoin holdings now stand at 386,700, with an aggregate purchase price of $21.9 billion, highlighting the company’s significant investment strategy in cryptocurrencies.
• The firm executed a stock split on August 8, 2024, resulting in a 10-for-1 adjustment that reflects in the current outstanding share figures, influencing the perception of its market capitalization.
• The BTC Yield, a metric indicating the change in Bitcoin holdings relative to shares, was reported at 35.2% for the period from October 1 to November 24, 2024, and 59.3% year-to-date, offering insights into the company’s performance relating to its Bitcoin assets.

Convertible Notes Offering

MicroStrategy has successfully completed the purchase of 55,500 BTC, valued at $5.4 Billion, following the private offering of zero-coupon convertible senior notes due in 2029, which raised a total of $3 billion.

This capital raise includes an additional $400 million generated from an initial purchasers’ option, which is a clause that allows initial buyers to purchase more notes at the same terms. The net proceeds from this offering are approximately $2.97 billion, which can be significant for funding future operations or further cryptocurrency investments.

The convertible notes come with a 55% conversion premium, calculated over the weighted average price of the company’s Class A common stock. This means that investors can convert their notes into shares at a price that is 55% higher than the average stock price, potentially benefiting from future stock price appreciation if MicroStrategy continues to perform well.

This update follows recent comments from Michael Saylor, who emphasized the need for more growth in cryptocurrency investments and the successful completion of the $3 billion convertible notes offering, which reflects the company’s strong positioning in the market.

At-the-Market (ATM) Sales Agreement

MicroStrategy has entered into an At-the-Market Sales Agreement, allowing it to issue and sell Class A common stock valued at up to $21 billion. This strategy can provide the company with substantial liquidity for operational expenditures or further Bitcoin acquisitions.

Between November 18 and November 24, 2024, the company sold 5,597,849 shares and raised net proceeds of $2.46 billion. Despite this significant issuance, MicroStrategy maintains authorization for approximately $12.8 billion worth of shares. This ensures that the company retains flexibility in capital allocation, which is critical in managing its expansive cryptocurrency portfolio.

Bitcoin Holdings

The latest acquisition of 55,500 Bitcoin took place between November 18 and November 24, 2024, with a total investment of $5.4 billion. This translates to an average purchase price of about $97,862 per Bitcoin, which includes associated transaction fees.

As of November 24, 2024, MicroStrategy’s total Bitcoin holdings have reached 386,700, with an aggregate purchase cost of $21.9 billion. The average purchase price over its entire Bitcoin investment history is approximately $56,761 per Bitcoin. Such a substantial holding reflects MicroStrategy’s strategic commitment to Bitcoin as a primary asset within its investment framework.

BTC Yield KPI

The BTC Yield, a Key Performance Indicator that assesses the percentage change in the ratio of Bitcoin holdings to the assumed diluted shares outstanding, has shown robust results. For the period from October 1 to November 24, 2024, the BTC Yield was reported at 35.2%, while the year-to-date figure stands at 59.3%.

This performance metric is crucial for investors assessing the viability and potential return of MicroStrategy’s cryptocurrency strategy. A higher BTC Yield typically indicates effective management and a successful increase in Bitcoin assets relative to the company’s equity.

Stock Information

As of November 24, 2024, the total shares outstanding for MicroStrategy are broken down into Class A and Class B common stock. The company has 210,837,000 shares of Class A and 19,640,000 shares of Class B, leading to a total of 230,477,000 basic shares outstanding.

Additionally, when factoring in the assumed diluted shares, the total rises to 266,510,000. These figures reflect a 10-for-1 stock split that was implemented on August 8, 2024, enhancing liquidity and potentially attracting more investors by lowering the per-share price.

BTC Yield Limitations

While BTC Yield provides valuable insights into MicroStrategy’s operational performance related to its Bitcoin investments, it does have its limitations. The metric does not take into account the company’s debts or liabilities, nor does it consider the sources of capital used for Bitcoin acquisitions.

Consequently, BTC Yield should not be viewed as an absolute indicator of financial performance or shareholder return. It functions primarily as a comparative measure within the context of the company’s overall strategy and market conditions.

The information provided in this report adheres to Regulation FD Disclosure and is not considered “filed” under the Exchange Act. MicroStrategy continues to provide transparent updates regarding its operations and financial status, ensuring compliance with regulatory standards while informing stakeholders about its strategic direction.

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Disclaimer: All information provided on this website is for informational purposes only and should not be construed as financial or investment advice. We do not guarantee the accuracy, completeness, or timeliness of the information, and we are not responsible for any financial decisions you may make based on this information. Cryptocurrencies are highly volatile assets, and any investment in them carries a high level of risk.

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