Andrew Bary
MicroStrategy more than tripled its purchases of Bitcoin in the latest week, buying $1.9 billion of cryptocurrency financed with equity sales and a new issue of preferred stock after snapping up less than $600 million worth in the prior week.
The company, which does business as Strategy, is the largest corporate Bitcoin holder. It held 528,185 coins as of March 30, more than 2% of the Bitcoin outstanding, according to an 8-K report released Monday.
MicroStrategy, whose strategy has been to issue equity, debt and preferred stock to acquire the currency, has been on a buying spree since October. Its Bitcoin holdings have more than doubled since Sept. 30, when it held 252,200 coins. It had about 447,000 coins at the end of 2024.
It continues to sell stock and preferred shares to fund the buying. From March 24 through Sunday, the company sold 3.6 million shares of common stock through ongoing at-the-market equity offerings for net proceeds of $1.2 billion. It also issued 8.5 million shares of its new 10% Strife preferred stock at $85 each, raising $711 million after underwriting discounts and fees.
MicroStrategy stock was off 4.7% in early trading Monday to $275.70, reacting to a drop in Bitcoin and overall weakness in the stock market. The price of Bitcoin was down about 2% from Friday to around $82,000.
As Bitcoin prices have come down from a record high of about $107,000 in late January, the company's paper profits on its holdings have diminished. Its average cost is about $67,500. Still, the stock continues to trade at a big premium to the value of the company's Bitcoin holdings.
The company's market value is now around $72 billion, and it has about $10 billion of debt and preferred stock outstanding. That total, the enterprise value, is close to double the $43 billion its Bitcoin holdings are currently worth.
Barron's has argued that MicroStrategy stock is an expensive way to get exposure to Bitcoin. Exchange-traded funds such as the iShares Bitcoin Trust are a better deal, trading around parity to their Bitcoin holdings.
Among MicroStrategy securities, the Strife preferred stock, trading with the ticker STRF, looks superior to the common stock. It offers a current yield of 10.75%.
Write to Andrew Bary at andrew.bary@barrons.com
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March 31, 2025 11:06 ET (15:06 GMT)
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