In an interesting turn of events, MicroStrategy, one of the most sizable corporate holders of Bitcoin, revealed plans to initiate a considerable $750 million stock sale. Not that it took speculative minds by storm, there’s a potent possibility of this mammoth capital being redirected towards purchase of more Bitcoin.
As the company filed with the Securities and Exchange Commission, a glimpse was granted into their agreement with Cowen and Company, Canaccord Genuity and Berenberg Capital. Operating at both ends of the spectrum, MicroStrategy suggests two possible applications of the generated capital: Acquisition of Bitcoin in significant amounts, or meeting the demands of much needed corporate working capital.
Coming from the high office, Andrew Kang, CFO of MicroStrategy, spoke of the potential allocation of funds during a second-quarter earnings call. The chosen course, he articulated, may include Bitcoin purchase or retiring company’s outstanding debt. The firm, founded by Michael Saylor, holds approximately 152,800 Bitcoin, translated to a whopping $4.5 billion at the prevalent rates. The ambitious company added to its stack, acquiring 12,333 Bitcoin during the second quarter, followed by another 467 in July.
It was not surprising hence, that the value of Bitcoin climbed nearly 2%, reaching $29,771, right after the announcement. This risky move by MicroStrategy has certainly been rewarding, with a rise of nearly 200% in its shares due to the ongoing Bitcoin rally. From January 3, the MSTR shares surged from $145.02 per share to $434.98 at the time of articulating these observations, demonstrating the possible power and potential of strategic and intelligent financing.
Yet, it might question the stability of a company whose interests are more and more connected to extremely volatile crypto market and possible regulatory changes in crypto sector. If crypto would fall or even be banned in some areas, would MicroStrategy have a backup plan? As it seems now, crypto is a major driver of company’s finance position.
Yet as often, the magnifying glass of speculation can only crystallize the broader picture when larger market forces and intrinsic company dynamics intersect, which is why ongoing observation is key. The ambition is sure to cast ripples in the Bitcoin sphere, be it positive or negative, only time can tell.
Source: Cointelegraph
