Michael Saylor’s MicroStrategy buys another 2,530 Bitcoin worth $243 million

MicroStrategy, the business intelligence firm known for its aggressive Bitcoin acquisition strategy, has added another 2,530 BTC to its reserves. According to an 8-K filing with the Securities and Exchange Commission on Monday, the company spent approximately $243 million between January 6 and January 12, purchasing Bitcoin at an average price of $95,972 per coin.

This marks the firm’s tenth consecutive week of Bitcoin acquisitions. Last week, MicroStrategy announced the purchase of 1,070 BTC for $101 million in cash, averaging $94,004 per coin. These transactions follow the sale of 710,425 company shares during the same period, which generated funds for further Bitcoin purchases.

The self-proclaimed Bitcoin treasury company aims to raise $42 billion by 2027 through at-the-market stock sales and convertible debt offerings to fund further Bitcoin purchases. MicroStrategy has already achieved more than two-thirds of its equity-raising target in under three months since unveiling its ambitious plan.

MicroStrategy’s “21/21” plan expansion

The latest acquisitions are part of MicroStrategy’s ambitious “21/21” plan, revealed in late October 2024, to raise $42 billion through equity and fixed-income securities offerings by 2027. These funds are earmarked for Bitcoin investments.

Earlier this year, the company doubled down on the plan, with a proposed $2 billion perpetual preferred stock offering. The stock, senior to its A-class common stock, includes provisions for conversion to common shares, cash dividend payments, and redemption options. 

Benchmark equity analyst Mark Palmer suggested this approach could attract institutional investors such as insurance companies, pension funds, and banks.

MicroStrategy made headlines in 2024 with record Bitcoin purchases totaling 90,079 BTC, valued at over $6 billion. Significant acquisitions included 27,200 BTC in November for $2 billion and 18,300 BTC in September for $1.11 billion.

On the final day of 2024, the company announced it had spent $209 million to acquire 2,138 BTC at an average price of $97,837. This followed a $509 million Bitcoin purchase earlier in December.

As of January 13, MicroStrategy holds 450,000 BTC, representing approximately 2.1% of Bitcoin’s total supply of 21 million coins. The firm’s total holdings, acquired at an average price of $62,691 per coin, amount to a total expenditure of $28.2 billion, including fees and expenses, executive chairman Michael Saylor reported.

Is buying Bitcoin an unnecessary risk?

MicroStrategy’s Bitcoin acquisition strategy has sparked quite a debate among market analysts across all financial sectors. Some investors have raised concerns about the sustainability of its equity—and debt-funded purchases. The firm’s $81 billion market cap trades at a significant premium to its Bitcoin net asset value, a point of contention for skeptics.

Despite criticisms, the company has spent over $18 billion on Bitcoin in the past ten weeks alone. Its strategy relies heavily on Bitcoin’s price appreciation, with financial analyst Jacob King warning of potential risks. “The cycle only works if BTC keeps rising. If BTC stalls or crashes, the loop collapses. This is unsustainable and is a giant Ponzi,” King said.

On the other hand, proponents like Ki Young Ju, CEO of CryptoQuant, dismissed concerns about the strategy, stating, “It would take a world-ending catastrophe to bring MicroStrategy down.”

MicroStrategy only goes bankrupt if an asteroid hits Earth.

For 15 years, #Bitcoin has never dropped below the cost basis of long-term whales, which currently stands at $30K.$MSTR debt is $7B and its $BTC holdings are worth $46B. Based on BTC alone, the liq price is $16.5K. pic.twitter.com/cTwwTGYif4

— Ki Young Ju (@ki_young_ju) December 17, 2024

Some analysts believe MicroStrategy’s vast Bitcoin holdings could offer unique advantages. “There’s potential to make profits out of that huge liquidity pool of Bitcoin,” said Alexander Panasenko, head of product management at VixiChain. “When you are holding a huge amount of that inflationary-proof asset that actually stores value, you can make money just from holding it or through lending and borrowing.”

MicroStrategy (MSTR) stocks were down about 3.8% pre-market trading, changing hands at $327.91. However, the equity has been up by almost 10% in the last week, with an 8.24% uptick from its year-to-date values, per Yahoo Finance updates. 

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