MicroStrategy buys additional 19,452 Bitcoins for $1.3 billion

Shares of MicroStrategy Inc. rallied 8.5% during the early morning session Wednesday after the major bitcoin (BTC) corporate backer said it shelled out $1.3 billion to acquire an additional 19,452 bitcoins.

Bitcoin futures were last up 6.4% at $50,660, after dropping 14.1% over the past two days. MicroStrategy said as of Wednesday, it held around 90,531 bitcoins, which were bought for $2.17 billion.

The Virginia-headquartered enterprise software group said it paid an average price of $52,765 per bitcoin, including fees and other expenses. According to Reuters, the company’s bitcoin holdings are worth around $4.48 billion.

One of the biggest bets on bitcoin

The latest purchase turns piles of zero-interest debt into one of the single biggest bitcoin investments ever made by a publicly-traded company.

MicroStrategy’s single-biggest US dollar-investment in the digital asset is second only to Tesla’s $1.5 billion bet on the list of (known) bitcoin investments by an American company.

“The company remains focused on two corporate strategies of growing our enterprise analytics software business and acquiring and holding bitcoin,” Michael J. Saylor, MicroStrategy Inc chief executive officer, said.

MicroStrategy, the largest independent and publicly traded business intelligence company in the world, spent 2020 steadily raking in bitcoin after executing its first investment in August, using existing cash on its balance sheet to buy the crypto.

MicroStrategy on a tear

The news of MicroStrategy’s purchase comes as the price of BTC climbed back to more than $50,000 late Wednesday, though it later fell below that mark. The rally follows news on Tuesday night from Square, which announced it acquired $170 million worth of the crypto.

Jack Dorsey, Square Inc’s chief executive, on Tuesday pledged to “double down” on the payment group’s commitment to the world’s most popular digital asset.

MicroStrategy’s stock has been rising since it disclosed its initial bitcoin acquisition in August, increasing more than 400%, as some market players flocked to the shares to gain exposure to the digital currency.

 

Image courtesy of Guardian News/YouTube Screenshot

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