Overview of the Purchase#
Michael Saylor’s Strategy Inc. has made headlines by purchasing approximately $76.5 million worth of Bitcoin. This acquisition was funded through the sale of its common stock, which is a type of equity that represents ownership in the company.
Details of the Acquisition#
According to a regulatory filing, Strategy acquired 1,031 Bitcoin between March 16 and March 22. The funds for this purchase came from at-the-market sales of its Class A common stock. This method allows the company to sell shares directly to investors at current market prices.
Previous Funding Activities#
This recent Bitcoin purchase follows a significant fundraising effort the week before, where Strategy raised $1.2 billion by issuing “Stretch” perpetual preferred shares. Preferred shares are a type of equity that typically provides fixed dividends and has priority over common stock in the event of liquidation. By using preferred shares, the company can avoid diluting existing shareholders' ownership stakes, but it incurs a fixed obligation at an 11.5% interest rate.
Current Bitcoin Holdings#
With this latest acquisition, Strategy now holds over 762,000 Bitcoin, which is valued at approximately $54 billion. The average purchase price for these Bitcoin is around $75,700, which is above the current trading level of Bitcoin, estimated to be near $70,000. This strategy of alternating between funding methods reflects Saylor's approach to navigating market conditions.