Software company MicroStrategy (MSTR), which has transformed into a corporate bitcoin (BTC) vault, intends to sell up to $500 million worth of stock to finance additional cryptocurrency purchases.
The stock offering, which will be used for “general business purposes such as the acquisition of bitcoin”, was disclosed in the filing with the Securities and Exchange Commission.
This is a first concrete proof that founder Michael Saylor still insistent on his goal to transform MicroStrategy into the crypto proxy, despite his recent resignation as CEO to focus on bitcoin acquisitions. He has been spending the funds raised from the stock and bond offerings to purchase roughly more than $2 billion worth of bitcoin since 2020.
As MicroStrategy’s stock has consequently become tethered to bitcoin’s price, the firm has lost $1.2 billion on its bitcoin investment this year. However, as the price of bitcoin increased by over 10% on Friday, the shares rose by 12%.
The announcement of the stock offering, which is expected to reduce the value of existing shares, has caused the stock to decline by around 1.5% in after-hours trade.
The stock offering is led by two renowned investment banks with crypto-related stocks coverage, Cowen and BTIG.
Recently, the District of Columbia has filed a lawsuit against Saylor and MicroStrategy for allegedly avoiding taxes on Saylor’s earnings there.
