MicroStrategy to sell up to $500 million worth of stock. Proceeds may be invested in bitcoin

MicroStrategy has applied to sell up to $500 million worth of stock. The proceeds could be used to buy bitcoin, according to a September 9, 2022 prospectus supplement.

According to the document, MicroStrategy has entered into an agreement with investment bank Cowen and Company and BTIG, which will act as financial intermediaries. It involves the sale of Class A common stock at a price of $0.001 per paper.

“We intend to use the net proceeds of the offering for corporate purposes, including the purchase of bitcoin, unless otherwise specified in the applicable prospectus supplement. We have not determined the amount of net proceeds to be used for any particular purpose,” the statement said.

The company said the amount of the first cryptocurrency purchase will depend on “market conditions.”

As of this writing, bitcoin is trading near $21,559. The asset has risen 8 percent in the past week, according to CoinGecko.

BTC/USDT hourly chart of the Binance exchange. Data: TradingView.

MicroStrategy shares reacted positively to the news. By the end of the trading session on September 9, the company’s securities gained almost 12%.

Recall that in August 2022 MicroStrategy founder Michael Saylor left his position as CEO to focus on “innovation and long-term corporate strategy,” which involves continuing to buy and hold bitcoin.

That same month, the Federal District of Columbia (USA) filed a lawsuit against MicroStrategy and Saylor. The prosecutor’s office accuses them of fraud for tax evasion.

Irina Dudak

News correspondent of the cryptocurrency and blockchain market.

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