Michael Saylor buys 55,500 more BTC, average price nears $57,000
This morning, MicroStrategy CEO Michael Saylor announced a 55,500-bitcoin purchase using $5.7 billion of his previously announced $42 billion capital raise. The company now owns 386,700 bitcoins (BTC) worth $37 billion.
Two hours into NASDAQ’s Monday trading session, MicroStrategy’s market capitalization was $90 billion or a 2.4X multiple on its BTC holdings. Because the converted software company is essentially just a BTC acquisition company, many investors value the company as a multiple on its assets rather than a traditional multiple on sales or earnings.
Saylor still has tens of billions left of the previously announced, $42 billion fundraise and will use the remainder of this round to buy more BTC. He has also forecasted additional fundraises after he closes this round.
As of publication time, MicroStrategy’s average purchase price was $56,761 or 40% below BTC’s current price.
By issuing shares and selling debt convertible into shares, the company has ballooned its number of shares outstanding to over 205 million.
Despite this dilution, the company claims to have delivered an accretive, BTC-denominated ‘yield’ of 59.3% year-to-date on a per-share basis.
Using a proprietary metric — assumed diluted shares outstanding — that ignores future conversion of debt into shares, the company has added 112,125 BTC across all outstanding shares via an average acquisition of 341 BTC per day throughout 2024.
MicroStrategy critics draw Hunt brothers and silver analogies
MicroStrategy pioneered the curious strategy of leveraged BTC acquisition via public markets. Because Saylor is aggressively attempting to corner the market for leveraged BTC purchases at a corporate level, some observers liken him to the Hunt brothers.
In the 1970s and 1980s, Nelson and William Hunt accumulated vast amounts of spot silver and futures contracts. By the early 1980s, the duo had amassed nearly one-third of the world’s supply, sending the price of silver soaring from under $2 per ounce in the early 1970s to a peak near $50 per ounce.
Read more: MicroStrategy down 16% after short-seller’s report
Comments from BTC and MicroStrategy investors under the allegation called the claim foolish, empty, mid, nonsense, and nothing like the Hunt brothers’ situation.
Others pointed out the COMEX’s change in leverage rules at that time, which disrupted futures contracts, silver prices, and the Hunt brothers’ ability to manipulate silver prices.
In any case, MicroStrategy owns less than 2% of BTC’s supply — far less than the Hunt brothers’ percentage of silver that exceeded 30%.
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