MicroStrategy Inc Set to Buy More Bitcoin After $1 Billion Purchase

MicroStrategy Inc, the enterprise software firm, whose shares have surged more than 400% in the past year is set to buy more bitcoin after a $1 billion purchase, announced the company on Wednesday.

Few days after finalizing another sale of debt, the Virginia based software company’s latest venture into the cryptocurrency market with the purchase of 19,452 bitcoins pressed its entire holdings past The purchase of 19,452 bitcoins puts the company’s total holdings of the digital token at 90,531 coins at a price of $2.17 billion.

In a statement issued by the software company on Wednesday, it paid an average of $52,765 for closely 20,000 tokens last week after issuing $1.05 billion in convertible bonds.

The enterprise software firm that has also embraced Bitcoin investing, revealed its first bitcoin purchase in August, using existing cash on its balance sheet to acquire the cryptocurrency.

MicroStrategy, whose shares soared to 13 %, in its statement mentioned that it will continue to buy Bitcoin using “excess cash” and may issue more debt to finance the purchases. 

However, according to its 10k filing, the enterprise, meanwhile reported $70.7 million in collective impairment losses as of the end of last year that the company attributed to Bitcoin’s price fluctuations.

Bitcoin, which rebounded from a two-day route, rising 3.5% to $49,625, MicroStrategy has paid an average price of almost $24,000 for its coins, giving it a gain of about 100%.

Buying Bitcoin comes with its own risks and the tokens can be subject to losses when the price dips below the carrying value at any given time since the attainment.

The software company first announced Bitcoin buys last summer, saying it used corporate cash reserves. MicroStrategy has since completed two convertible debt offerings to raise capital to finance to make additional purchases.

Of these, the freshest offering has been completed last week.

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