MicroStrategy Inc (NASDAQ:MSTR) has announced the acquisition of approximately 51,780 bitcoins for $4.6 billion, funded through a recent stock offering. As of Sunday, the company's total bitcoin holdings reached roughly 331,200, purchased at an average price of $49,874 each, inclusive of fees and expenses.
From November 11 to November 17, MicroStrategy sold approximately 13.6 million shares, generating net proceeds of about $4.6 billion, after deducting sales commissions. Following these transactions, the company has around $15.3 billion worth of shares remaining available for sale under the existing Sales Agreement.
The company also reported a BTC Yield, a key performance indicator (KPI), of 20.4% from the beginning of October to November 17, and a year-to-date yield of 41.8%. The BTC Yield reflects the percentage change in the ratio of the company's bitcoin holdings to its Assumed Diluted Shares Outstanding.
MicroStrategy's strategy involves using equity capital to purchase bitcoin in a manner that management believes is accretive to shareholders. The company emphasizes that BTC Yield is not a traditional financial measure and should not be seen as indicative or predictive of the trading price of MicroStrategy's common stock.
The information in this article is based on a press release statement.
In other recent news, MicroStrategy Incorporated has reported its Q3 earnings, revealing an aggressive Bitcoin acquisition strategy despite a drop in total software revenues. The company, the largest corporate holder of Bitcoin, has a portfolio of 252,220 Bitcoins and plans to raise $42 billion over the next three years for further acquisitions.
On the software side, while a transition to cloud services resulted in a 10% revenue drop, subscription services are growing, now accounting for 24% of total revenue.
In the cryptocurrency sector, short sellers have faced significant losses coinciding with a sharp rise in Bitcoin's value. Coinbase, a crypto-related company, saw a nearly 16% increase in U.S. premarket trading. MicroStrategy, a major corporate supporter of Bitcoin, saw short sellers experience losses exceeding $1.2 billion.
The U.S. presidential election has also influenced the market, with analysts predicting potential gains for crypto stocks like MicroStrategy and Coinbase Global (NASDAQ:COIN) if Donald Trump wins due to his more favorable regulatory stance.
InvestingPro Insights
MicroStrategy's recent bitcoin acquisition aligns with its aggressive investment strategy, which is reflected in several key metrics from InvestingPro. The company's stock has shown remarkable performance, with a 600.61% price total return over the past year and a 439.33% return year-to-date. This exceptional growth is consistent with MicroStrategy's reported BTC Yield of 41.8% year-to-date.
However, investors should note that MicroStrategy's aggressive bitcoin strategy comes with significant volatility. InvestingPro Tips indicate that the stock price movements are quite volatile, and the RSI suggests the stock is in overbought territory. Additionally, the company is trading at a high revenue valuation multiple, with a Price / Book ratio of 18.29 for the last twelve months as of Q3 2024.
Despite the strong returns, MicroStrategy faces financial challenges. The company is not profitable over the last twelve months, with a negative operating income of $878.14 million USD. InvestingPro Tips also highlight that net income is expected to drop this year, and analysts do not anticipate the company will be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for MicroStrategy, providing a deeper understanding of the company's financial position and market performance.
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