The business data analytics firm has been investing in BTC since August 2020.
Michael Saylor, CEO of enterprise data analytics company MicroStrategy, announced Monday via a Twitter post and company filing that the firm purchased an additional 7,002 Bitcoin (BTC),
worth approximately $414.4 million, at an average price of $59,187 per
coin. MicroStrategy sold 571,001 shares of company stock between Oct. 1
and Nov. 29 at $732.16 apiece, raising a total of $414.4 million in
cash.
As of Monday, the company now owns 121,044 BTC, worth up to $3.57
billion. It was acquired at an average price of $29,534 per coin and
included capital appreciation from previous coins.
In August 2020, MicroStrategy declared it would adopt Bitcoin as its treasury reserve asset,
citing the digital currency being a “dependable store of value” and an
attractive investment with greater long-term return potentials than
holding cash. In addition, the firm drew attention to the unprecedented
stimulus being printed by governments to combat COVID-19 as a catalyst
for potential inflation and subsequent depreciation of fiat currencies.
Since then, MicroStrategy has almost consistently purchased Bitcoin every single quarter.
Normally,
everyday investors suffer losses when the price of Bitcoin goes down
and gains when the price appreciates. However, that’s not necessarily
the case for MicroStrategy. According to its earnings conference
transcript published last month, Phong Le, president and chief financial
officer of MicroStrategy, said
that the company’s Bitcoin holdings are classified as “indefinite-lived
intangible assets under applicable accounting rules.” This means that
at any time subsequent to its acquisition, if the fair value, or market
value, of the Bitcoin dips below its book value, the company will need
to recognize impairment charges. These impairment charges can then be
used to legally offset its corporate income tax liability.
