MicroStrategy Snubs Harsh Bear Storm As It Buys The Bitcoin Dip

On Wednesday, MicroStrategy (MSTR) announced that it had purchased an additional 480 bitcoins for about $10 million. 

According to a Form 8-k filed with the Securities Exchange Commission, the company bought the said coins at an average price of $20,817 per unit during the period between May 3 and June 28. The latest foray now brings the company’s total stash to 129,699 Bitcoins which were acquired for approximately $3.98 billion at an average price of $30,664 per coin.

The latest purchase comes after an almost three-month-long pause on further purchases following a bloody market sell-off that saw the company’s balance sheet fall in the red. MicroStrategy last purchased bitcoin in early April, splashing $190 million on 4,167 coins at an average price of $45,714. Since then, the market has dropped by 50%, raising concerns over the company’s financial health, with the company’s shareholders losing over 63% in the past year.

The company’s Bitcoin portfolio also came under intense stress during Bitcoin’s drop to the sub-$20k range, sparking fears of a possible margin call on the company should the BTC price fall lower. By mid-June, the business intelligence company was sitting on an unrealized loss of just over $1 billion on its Bitcoin holdings after the asset’s price plunged below $23,000.

In May, Michael Saylor, the company’s CEO dismissed the margin call talks, stating that the company’s HODL strategy remained unencumbered and that they would continue deploying more cash for BTC purchases as cash flow permitted.

MicroStrategy, which is by far the largest ‘Bitcoin holding’ publicly listed company started purchasing the cryptocurrency in August 2020 when a single unit was valued at just under $12,000. Since then, the company has been making occasional purchases on price dips utilizing Junk Bonds and convertible note sales. The company’s stock also enjoyed success alongside Bitcoin’s bullish ride. However, that was not long-lived as the stock price began tumbling occasionally, with Bitcoin’s all-time high in November 2021 putting the last nail in the coffin.  

As of writing, Bitcoin is exchanging hands at $20,045, bringing MSTR’s bitcoin stash to about $2.6 billion. On the other hand, MicroStrategy is leading the sell-off in crypto-related stocks with its share price falling 4.8% on the day.