MicroStrategy Considers Buying More BTC After $500M Stock Sale Despite Having a Loss of $1 Billion

Public-listed software developer MicroStrategy MSTR is one of the largest institutional buyers of Bitcoin BTC/USD, with more than 129,000 BTC in its vault. The company plans to add more BTC to its coffers by selling its class A common shares.

According to an SEC filing, MicroStrategy entered an agreement with two firms, Cowen and Company and BTIG, to sell up to 11,474,290 shares worth around $500 million.

"We intend to use the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin," said the company in the prospectus. "Future fluctuations in Bitcoin trading prices may result in our converting Bitcoin purchased with the net proceeds from this offering into cash with a value substantially below the net proceeds from this offering."

Michael Saylor, Microstrategy's Founder, has always been a vocal proponent of Bitcoin. He recently stepped down as the company's CEO to take up the role of Executive Chairman and focus on acquiring Bitcoin. 

"I will remain an executive officer of the company and chairman of the Board of Directors, as well as assuming the chair of investments committee and leading our bitcoin acquisition strategy," Saylor had said during the company's Q2 concall. 

Since 2020, MicroStrategy has acquired more than 129,000 Bitcoin worth approximately $2.5 billion by raising funds via bonds and stock offerings. However, the company currently sits at a loss of nearly $1 billion because of the price crash, according to BitcoinTreasuries data.

Due to the extent of the large holdings, the company's share price has started mimicking the price of BTC, so much so that its share rose nearly 12% on Friday when BTC jumped about 10%.