MicroStrategy plans to buy even more bitcoins (up to $500 million)

MicroStrategy is one of the largest institutional investors in bitcoin. The company’s chairman, Michael Saylor, is a bitcoin maximalist who decided not to sell the company’s assets despite a notable drop in the price of bitcoin. Bitcoin has lost about two-thirds of its value since reaching an all-time high in November last year.

MicroStrategy files for up to $500M in stock offering

On Friday, September 9, 2022, MicroStrategy filed a request with the US Securities and Exchange Commission (SEC). In it, MicroStrategy announced its intention to sell up to $500 million worth of shares in order to complete the cryptocurrency purchase.

In the filing, MicroStrategy says the share offering will be used for “general corporate purposes, including the acquisition of bitcoin.” This filing is a positive sign for the bitcoin community that shows MicroStrategy is not abandoning its BTC acquisition strategy.

Mr. Saylor stepped down as CEO a few months ago and is now the executive chairman of MicroStrategy. Since his departure, the software publisher has made no new purchases of bitcoin.

Since 2020, the company has used funds raised from its stock and bond offerings to buy around 130,000 bitcoins worth more than $2 billion.

Due to the size of bitcoin holdings, the stock of the company changes in line with changes in the price of bitcoin. BTC hasn’t performed well this year and MicroStrategy has suffered a $1.2 billion loss on its holdings. The decline in the price of bitcoin affected MSTR shares.

Stocks surged into double digits on Friday as bitcoin surged about 10%. After several hours of trading, a 1.5% drop was seen after news of this share offering broke. The placement of shares is expected to result in a reduction in the value of existing shares.

MicroStrategy’s stock offering is led by two of the leading cryptocurrency stock investment banks, Cowen and BTIG.

MicroStrategy sued for tax evasion

Saylor and MicroStrategy were sued for tax evasion. Mr. Saylor was sued in the District of Columbia for non-payment of income taxes, despite having lived in the area for over a decade.

MicroStrategy was also sued for helping Mr. Saylor evade taxes, prosecutors said. Attorney General Carl A. Racine tweeted about the lawsuit, saying Saylor legally owes hundreds of millions of dollars in taxes on income he earned while living in Washington.

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