Microstrategy Stock Soars After Buying $4.6 Billion Worth of Bitcoin

Shares of Microstrategy, the company owned by renowned Bitcoiner Michael Saylor, soared after the company said it bought billions worth of Bitcoin.

Microstrategy’s stock rose by almost 25% after announcing on Nov. 18 that it purchased $4.6 billion worth of Bitcoin. Microstrategy shares have soared by more than 500% year to date, beating most stocks in the S&P 500, according to data from Yahoo Finance.

This performance shows that Microstrategy’s decision to use Bitcoin as a reserve currency is currently paying off. With the addition of the recent purchase, MicroStrategy now holds 331,200 BTC.

Inside MicroStrategy’s Latest Bitcoin Purchase

According to a recent regulatory report, MicroStrategy increased its Bitcoin holdings over the past week, purchasing 51,780 BTC for approximately $4.6 billion. This brings its total Bitcoin holdings to 331,200 BTC, worth around $30 billion at the current Bitcoin price.

Microstrategy sold approximately 13.6 million of its shares to fund the purchase.

Why MicroStrategy Is Buying More Bitcoin

According to its latest quarterly report, MicroStrategy has adopted an ambitious fundraising strategy to raise $21 billion over the next three years through equity and fixed-income securities. The report also indicates that the company is offering a $21 billion equity offering.

MicroStrategy is one of the few companies worldwide using Bitcoin as a core reserve asset. It uses it to hedge against inflation and diversify its corporate holdings.

Microstrategy has been buying Bitcoin since August 2020 and has even open-sourced its Bitcoin reserve strategy for adoption. Although companies like Marathon Digital Holdings and Semler Scientific have already adopted this strategy, recent developments could convince more companies, especially with the ongoing Bitcoin rally.