Strategy, formerly MicroStrategy, has made another significant Bitcoin purchase, acquiring an additional 10,624 BTC for approximately $962.7 million. This acquisition, which occurred between December 1 and December 7, marks the company’s largest Bitcoin buy since July. At an average price of $90,615 per Bitcoin, the move has expanded its total holdings to 660,624 BTC, which is currently valued at around $60 billion.
The company’s Bitcoin investments have a total cost of about $49.4 billion, including fees and expenses, with an average purchase price of $74,696 per Bitcoin. This latest purchase brings the firm’s holdings to more than 3% of Bitcoin’s total 21 million supply. The current paper gains stand at approximately $10.6 billion, based on the current market price of Bitcoin.
Funding the Acquisition
To fund the purchase, Strategy utilized proceeds from the sale of its Class A common stock (MSTR) and perpetual Stride preferred stock (STRD). The company sold 5,127,684 MSTR shares for $928.1 million last week, and 442,536 STRD shares for $34.9 million.
As of December 7, Strategy still has $13.4 billion worth of MSTR shares available for issuance and sale. Moreover, the firm’s perpetual preferred stock programs, including STRK, STR C, STR F, and STRD, are designed to fund further Bitcoin acquisitions, adding $21 billion in available capital.
Bitcoin Strategy and Future Plans
Strategy’s ongoing Bitcoin accumulation is part of its larger strategy to raise capital for future Bitcoin purchases. The company has set a target to raise $84 billion by 2027 through equity offerings and convertible notes, an increase from its original $42 billion goal. This plan, known as the “42/42” plan, is part of the company’s broader effort to continue expanding its Bitcoin holdings.
The latest Bitcoin acquisitions come alongside a $1.44 billion USD reserve, which will be used to cover dividend payments on preferred stocks and interest on existing debt. According to Bitwise CIO Matt Hougan, this reserve should be sufficient for at least a year and a half, with no immediate need to liquidate Bitcoin to meet obligations.
The company’s first debt maturity is not due until February 2027, reducing the pressure on it to sell its Bitcoin in the near term.
Despite concerns from some analysts, Strategy’s financial strategy appears well-structured, with a solid cash reserve and a long-term plan for managing its Bitcoin holdings. The firm’s continued commitment to Bitcoin positions it as one of the largest corporate holders of the cryptocurrency globally.