MicroStrategy has announced that it has purchased an additional approximately 13,005 bitcoins for approximately $489 million in cash at an average price of approximately $37,617 per bitcoin, inclusive of fees and expenses.
However, shares of the Virginia-based enterprise software company closed down 9.7% Monday, mirroring a similarly sized slide in the price of bitcoin. The cryptocurrency was down more than 7% to around $32,600 per token as reports surfaced that China was scaling its crackdown on bitcoin mining.
MicroStrategy has in the past year gone from relative obscurity to a well-known force on Wall Street and in the crypto community, as a result of its aggressive bets on bitcoin and the preaching from Chairman and CEO Michael Saylor, who routinely touts bitcoin on Twitter has more than 1 million followers on the social media site.
In a CNBC interview last week, Michael Saylor defended the company’s crypto pursuits, which has involved debt offerings in order to buy more bitcoin. MicroStrategy also recently filed for a program to sell $1 billion worth of additional stock, proceeds from which can be used to acquire bitcoin.
“We rotated our shareholder base and transformed ourselves into a company that’s able to sell enterprise software and to acquire and hold bitcoin, and we’ve done it successfully with leverage. That has increased the power of the brand by a factor of 100. We just had our best software quarter in the last 10 years last quarter,” he added, noting total revenue was up 10% year over year. “The bitcoin business is driving shareholder returns. I think the employees are happy. The shareholders are happy.” MicroStrategy Chairman and CEO Michael Saylor
The stock hit a 52-week high on February. 9, trading above $1,300 per share, which was its highest level since the dot-com boom.
Bitcoin’s Performance Following MicroStrategy Purchase
Bitcoin has suffered a rough trading stretch in the past two months after hitting its all-time high near $65,000 in April, around the time of Coinbase’s blockbuster direct listing.
Following the purchase, the cryptocurrency was still on a losing streak, trading at $32,965.30, a 4.01% decline as of 8.00 A.M East African Time.
Bitcoin, the world’s largest cryptocurrency by market value, is still up about 11% year to date, based on Today’s morning’s trading price.