MicroStategy Pays Off Loan And Buys Additional 6,455 BTC• March 27, 2023 11:16 am • Comments
MicroStrategy has just announced that the company has paid off the $205 million loan that it had to Silvergate indicating that the company has a decent balance sheet.
What is even more impressive is that the firm decided to acquire an additional 6,455 BTC during the recent market rally which is worth around $150 million.
This makes the company’s total Bitcoin holdings to around 138,955 BTC amounting to around $4.1 billion which makes MicroStrategy the owner of 1 out of every 151 BTC in existence.
The company has already had a big reputation for betting on the success of Bitcoin with the company’s former CEO Michael Saylor being known as a Bitcoin maximalist.
Saylor had previously stepped down as CEO in order to focus mainly on the company’s digital asset strategy.
— Bitcoin News (@BTCTN) March 27, 2023
“Upon Silvergate’s receipt of the payoff amount, the credit agreement was terminated, and Silvergate released its security interest in all of MacroStrategy’s assets collateralizing the loan, including the Bitcoin that was serving as collateral,” the filing reads.
In the filing, MicroStrategy also mentioned that the company entered into an agreement with two companies — Cowen and Company and BTIG — to sell its aggregated class A common stock worth $500,000,000.
According to the latest updates, MicroStrategy issued and sold an aggregate of 1,348,855 shares under the sales agreement for aggregate net proceeds to MicroStrategy of roughly $339 million.
The latest Bitcoin acquisition by MicroStrategy is apparently the first such transaction so far in 2023. The previous purchase took place in late December 2023, with MicroStrategy buying 2,395 BTC at an average price of $17,181 for a total of $42.8 million between Nov. 1 and Dec. 21.
The recent BTC acquisition indicates that some institutions are still extremely bullish on the future of BTC and are focused on dollar cost averaging even if the price decides to go down again in the future.
At this point, due to the company’s large holdings in BTC, the stock of the company also correlates heavily to what the price of BTC does.
It is also interesting to note that the company was able to take out huge loans from insitutions like Silvergate by using its BTC as collateral.
Potentially, this could become very common in the future where digital assets can be used as collateral for any type of loans as creditors start to see the value of assets like BTC being a valid storage of value.
.@saylor's MicroStrategy added to its #bitcoin holdings with the purchase of nearly 6,500 coins over the past few weeks. The company also paid off the remainder of its Silvergate loan. $MSTR@SteveAlpher reportshttps://t.co/fxRUhuBJ4l
— CoinDesk (@CoinDesk) March 27, 2023
MicroStrategy (MSTR), a software company that was co-founded by crypto advocate Michael Saylor and that holds a large amount of bitcoin (BTC), prepaid the remaining principal on its $205 million loan from failed, crypto-focused Silvergate Bank, according to a filing with the U.S. Securities and Exchange Commission on Friday.
The loan payoff was made last Friday and totaled $161 million. As part of the satisfaction of the loan, 34,619 bitcoins held as collateral were returned to MicroStrategy’s custody. The company took out the loan last March.
The acquisition of another 6,455 bitcoins brings MicroStrategy’s holdings up to 138,955 bitcoins purchased at an average price of $29,817 each and worth roughly $3.88 billion at the current bitcoin price of $27,900.
— Decrypt (@decryptmedia) March 27, 2023
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