K33 | Research – Saylor Texas hedging: MicroStrategy to accumulate more bitcoin

Archived Articles

13 Sep 2022

Saylor Texas hedging: MicroStrategy to accumulate more bitcoin

MicroStrategy currently holds 129,700 BTC and seeks to buy more BTC by selling up to $500m in class A stock.

MicroStrategy currently holds 129,700 BTC and seeks to buy more BTC by selling up to $500m in class A stock.

Last summer, MicroStrategy pulled off a similar stunt by launching an at-the-market security offering on June 14th, 2021, to sell up to $1 billion of its class A stock aiming to buy BTC with the proceeds. Then MicroStrategy purchased $1bn worth of BTC over an extended period, with the first purchase being announced two months after the offering announcement.

At current prices, $500m equals 22,500 BTC. This would increase the BTC balance of MicroStrategy to 152,000 BTC, representing 88.5% of the BTC held by public companies.

In 2020 and 2021, MicroStrategy also purchased BTC through note offerings. These purchases were pre-announced, allowing the market to react to MSTR’s purchases. The class A stock purchases last year came in more surprising increments, this will likely be the case today as well, and investors should be prepared for various MicroStrategy purchase announcements in the coming months.