Disclaimer: The analyst who wrote this piece owns shares of MicroStrategy (MSTR).
MicroStrategy (MSTR) has once again demonstrated its commitment to cryptocurrency investment by increasing its bitcoin (BTC) holdings for the ninth consecutive week. As of the week ending January 5, the company added 1,020 BTC to its portfolio, representing an investment of approximately $101 million. This acquisition brings MicroStrategy’s total bitcoin holdings to an impressive 447,470 BTC, making it the largest holder of bitcoin among publicly traded companies.
The latest purchase was teased by Executive Chairman Michael Saylor in a recent post on X, underscoring his active engagement in the company’s strategic moves. MicroStrategy’s average purchase price for its bitcoin now stands at $94,004, raising the overall average price of their holdings to $62,503. This ongoing accumulation not only reflects the firm’s bullish stance on bitcoin but also its resolve to make strategic investments in the crypto market.
Funding for this latest acquisition was sourced through share sales under MicroStrategy’s at-the-market (ATM) program, which still holds a robust $6.77 billion for future acquisitions. Following a turbulent period, where the share price dropped nearly 50% from a high of $543 on November 21, the stock showed signs of recovery with a notable 13% gain on Friday, now trading around $353 in pre-market trading.
In addition to its bitcoin purchases, MicroStrategy has announced plans to raise up to $2 billion through a preferred stock offering. This initiative operates separately from its 21/21 plan, which involves $21 billion in equity and fixed income. The preferred stock will have certain advantages over Class A common stock, including convertible features, dividend payments, and redemption provisions. While the terms of this perpetual preferred stock and its pricing are yet to be finalized, the offering is anticipated to occur in the first quarter of 2025, with the primary goal of acquiring additional bitcoin.
As MicroStrategy continues to prioritize bitcoin in its investment strategy, investors will be keenly watching how these developments unfold and what impact they will have on the company’s overall valuation and the broader crypto market.
