2023-08-02 14:01:54
Recently, MicroStrategy once again became the largest corporate crypto holder globally after announcing that they bought $361.4 million worth of 12,800 bitcoins at an average price of $28,233 since the first quarter. With this, they now own 152,800 bitcoins, which is a particularly significant increase compared to 132,500 coins in February. And more buying is expected, as they are issuing $750 million worth of shares right now. It is difficult to say what MicroStrategy’s strategy is in the long term. They plan to use the proceeds from the now planned issue to purchase additional bitcoins, and also to realize other goals, such as debt repayment. For the first time since 2021, they are raising capital by issuing shares, while their share price has already tripled from what it was at the beginning of the year ($150). They also have to repay serious loans, amounting to 2.8 billion dollars in the period 2025-2028, but this year they are also expected to repay 250 million dollars. But they are doing well, as they now have $4.5 billion in bitcoin reserves on top of their $3 billion in debt. Specifically, with this strategy, the MicroStrategy stock works as a kind of spot bitcoin ETF. Now the big question is what the new capital from the share issue will be used for. If they buy most of it in bitcoin, then their stock will continue to closely follow the changes in the BTC exchange rate. If they repay debt, the trend of their stock price will be questionable. Their current purchases and expected further bitcoin purchases clearly put upward pressure on the exchange rate. But if sooner or later they have to sell a large part of their debt to pay it off, then it can have a different effect. Unless they will continue to raise capital from the stock market and specifically divert money from stocks to bitcoin.
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