MicroStrategy owns 439K Bitcoin worth $46B after acquiring 15,350 BTC for $1.5B last week.
Joining Nasdaq 100 on Dec 23, MicroStrategy stock could attract $2.1B in ETF-driven demand.
MicroStrategy plans to raise $42B for Bitcoin buys through stock and bond sales over 3 years.
MicroStrategy, a business intelligence firm headquartered in Tysons Corner, Virginia, announced on December 9 that it bought 15,350 BTC for $1.5 billion between December 9 and 15, 2024. The company used the proceeds from nearly 3.9 million shares through an earlier sales agreement to fund the acquisition and raised about $1.54 billion. These purchases were performed at an average price of $100,386 per Bitcoin, including fees.
With this purchase, MicroStrategy's total Bitcoin holdings are around 439,000, estimated at around $46 billion. These assets were procured for $27.1 billion, so the overall cost of gaining each Bitcoin is $61,725 on average. This acquisition was made for the sixth week, emphasizing the firm’s focus on Bitcoin strategy.
https://twitter.com/saylor/status/1868643218956734876 Inclusion in Nasdaq 100 Expected to Drive Demand
MicroStrategy's joining the Nasdaq 100 index on December 23, 2024, will be considered a major achievement. This development will increase the company's stock demand as ETFs and similar products rebalance their portfolios to track the index. This could mean an estimated $2.1 billion for stock buys since $350 billion is managed to related ETFs such as Invesco QQQ Trust.
This recognition reflects a trend toward increased institutional endorsement of the company’s strategy. Pundits have also linked growth in MicroStrategy’s stock, which stood at over 500% year to date, to the firm’s bitcoin acquisition. The stock price was $427.73 on Monday and has remained stable as cryptocurrency fluctuations continue.
Plans to Raise Capital and Strengthen Bitcoin Holdings
MicroStrategy intends to raise $42 billion in the next three years through corporate bond and stock offerings, with a large portion of the funds to purchase more Bitcoins. The firm’s strategy fits into an emerging pattern among cryptocurrency-oriented businesses using financial products to acquire Bitcoin assets.
Other firms followed the same strategies; for instance, Riot Platforms Inc. declared its purchase of $67.5 million worth of Bitcoins. These changes imply that companies are increasingly confident in cryptocurrency as a productive asset.
MicroStrategy has sustained flexibility in its financial policy by not involving itself in debt instruments with covenants or risks associated with the Bitcoin price fluctuation. This reduces the chances of pre-planned risks experienced due to movement in the stock market, hence enhancing investor confidence.
Its goal is to integrate new accounting standards by 2025, which is believed to enhance earnings reporting. The given market price for the MicroStrategy stock has kept analysts fairly positive, with price targets between $600 and $650.
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