MicroStrategy (NASDAQ: MSTR), the US-based software company which as of late has become known for its aggressive bullish bet on bitcoin, has now acquired even more bitcoins following its newest purchase round.
On Monday, MicroStrategy announced it had bought another 13,005 bitcoins valued at a combined $489 million, bringing its total bitcoin holdings to over 100,000 tokens. Despite this, however, shares of the tech company were 6% lower in pre-market trading, amid a broader decline in the price of bitcoin following news of a tougher crackdown on crypto mining across China.
The latest bitcoin purchase was made with funds raised from the company’s first-ever $500 million junk bond offering, which yielded 6.125%; considerably higher than the average junk bond yield of around 4%. The junk bond offering and subsequent bitcoin purchase has now solidified MicroStrategy as the biggest corporate bitcoin holder, with a collection boasting 105,085 tokens, at an average purchase price of $26,080 a piece.
To put the situation into clearer context, MicroStrategy’s latest purchase via junk bond funds was a whopping $100 million higher than the company’s entire operating cash flow since 2016. At the same time, the software company also revealed that it will be taking on a $284.5 million charge in the upcoming earnings report, due to price fluctuations associated with bitcoin’s volatility. This exceeds the company’s entire cumulative earnings since 2011.
Information for this briefing was found via MicroStrategy. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.