MicroStrategy (MSTR), a software developer turned corporate bitcoin (BTC) vault, plans to sell up to $500 million in shares to fund more purchases of the cryptocurrency.
Friday filing with the US Securities and Exchange Commission disclosed the stock offering, which will be for “general corporate purposes, including the acquisition of Bitcoin.”
The timing stands out because it’s the first tangible sign that founder Michael Saylor, who recently stepped down as CEO to become executive chairman and focus on buying bitcoin, is indeed not giving up on his bold plan to turn MicroStrategy in crypto proxy. As of 2020, it uses money raised from availability and connection offers to buy about 130,000 bitcoins worth more than $2 billion.
As a result, MicroStrategy’s stock became attached to the price of Bitcoin – resulting in a $1.2 billion loss on the Bitcoin bet given this year’s decline. But shares jumped 12% on Friday as bitcoin surged nearly 10%. However, the stock fell about 1.5% in after-market trading after the announcement of the share offering, which will dilute the value of existing shares.
Cowen and BTIG, two of the most prominent investment banks that cover crypto-related stocks, are leading the stock offering.
Saylor and MicroStrategy were recently sued by the District of Columbia for alleged evasion of Saylor’s income taxes in the district.
Oliver Knight and Aoyon Ashraf contributed reporting.