On June 15, MicroStrategy announced to the US Securities and Exchange Commission (SEC) that it could sell up to $ 1 billion of its own shares for additional investment in Bitcoin. The announcement comes after the company completed a $ 500 million bond offering, which will also be invested in cryptocurrency.
MicroStrategy remains the largest publicly traded Bitcoin holder. She owns 92 thousand BTC with a total value of about $ 3.6 billion. The average purchase price of a cryptocurrency is $ 24.4 thousand, writes RBC Crypto.
The company started buying bitcoin in the summer of 2020. In August, she invested about $ 250 million in the first cryptocurrency, after which in September she bought digital coins for another $ 175 million. In December, MicroStrategy issued five-year convertible bonds for $ 650 million. Thanks to this, on December 21, she held over 70 thousand BTC, acquired at an average price of $ 15.9 thousand.
Michael Sailor relies heavily on bitcoin, explained Andrey Podolyan, CEO of Cryptorg.exchange. He called it a positive fact that fundraising is quick. This may indicate that market saturation has not yet occurred.
The largest purchase of MicroStrategy took place in February, when bitcoin was worth about $ 52 thousand. Then the software manufacturer purchased 19.4 thousand BTC for over $ 1 billion, and the total number of coins in its portfolio exceeded 90 thousand. Funds were also raised through the placement of bonds.
MicroStrategy has chosen the most profitable strategy for itself, says Nikita Zuborev, senior analyst at Bestachange.ru. According to him, the company’s policy is more like a pre-planned PR-action, since thanks to Michael Saylor’s statements about MicroStrategy, millions of new investors around the world have learned.
Sailor actively speaks about the prospects of the crypto market and gives interviews to the largest American media. For example, in March, the head of the company predicted that in the future the value of the cryptocurrency could reach $ 5 million, and its capitalization – $ 100 trillion.
So far, this policy is working. At its peak, the potential earnings of an IT company from investing in bitcoins exceeded $ 3 billion, and its shares reached a 20-year high above $ 1.2 thousand. But as a result, the company’s capitalization began to strongly depend on the situation on the cryptocurrency market.
On April 14, when bitcoin reached its all-time high of $ 64.8 thousand, the value of MircroStrategy shares on the Nasdaq was $ 735. In the next month and a half, against the background of the collapse of the crypto market, it decreased by almost 40%, to $ 450. At the closing rate on June 15, quotes were $ 630. This means that a long-term depreciation of the bitcoin rate, such as in 2018-2019, may have a negative impact on the value of the company’s securities, and, possibly, on its activities.
The possible failure of Microstrategy is directly related to the potential collapse of the crypto market, Zuborev noted. He described the high correlation of its shares with the price of bitcoin as a significant risk. At the same time, the expert urged not to give up on MicroStrategy, even in a negative scenario.
“The company has other sources of financing, which should be enough to service debt obligations. And in the case of a multiple increase in the price of bitcoin until the end of 2021, MicroStrategy has a high potential for growth, including due to the PR effect, “the analyst explained.
He believes that despite the example of MicroStrategy, the purchase of bitcoin by large companies is unlikely to be a new trend. Due to the recent price collapse from $ 64.8 thousand to $ 30 thousand, many companies may have reconsidered their attitude to the risks of buying cryptocurrency.
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