MicroStrategy takes out a loan using its bitcoin stash
MicroStrategy will continue to collect Bitcoin (BTC). In a press release published this Tuesday, March 29, 2022, the company led by Michael Saylor announces that it has taken out a loan of 205 million dollars through its MacroStrategy subsidiary.
The loan was granted by Silvergate Bank, a bank specializing in fintech and cryptocurrency. It is guaranteed by the 820 million dollars in Bitcoin held by MacroStrategy, the subsidiary that stores most of the cryptocurrencies purchased by MicroStrategy.
In the event of a dramatic drop in the price of Bitcoin, the company could be forced to add cryptocurrency in this “collateral account”can we read in a filing with the Securities and Exchange Commission (SEC), the financial policeman of the United States.
With the money obtained, MacroStrategy will ” buy bitcoins, pay fees, interest and expenses related to the loan transaction ». The loan is provided under the Silvergate Exchange Network (SEN) program, which offers companies to borrow US dollars guaranteed by a reserve of bitcoins.
“The leveraged SEN loan gives us the opportunity to strengthen our position as the leading public company to invest in bitcoin. to execute our business strategy”says Michael Saylor, CEO of MicroStrategy.
? How to buy Bitcoin (BTC)?
MicroStrategy holds 125,051 bitcoins
Since August 2020, MicroStrategy has regularly converted its cash to Bitcoin (BTC). The group’s last purchase was in February 2022. MicroStrategy then had bought an additional 660 bitcoins at an average price of $37,865 per piece. Mirroring El Salvador, the software publisher generally benefits from a drop in the price of cryptocurrency.
Thanks to its recurring purchases, the firm has built up a reserve of 125,051 bitcoins, or approximately $6 billion. To finance its investments in Bitcoin, the American company notably sold part of its shares on the stock market last year.
According to Phong Lee, chief financial officer of MicroStrategy, the bitcoins collected by the company are not not intended for resale. The group’s strategy is to “buy and keep”relying on “excess cash flow” or fundraisers.
? On the same subject: Capital International exposes itself to Bitcoin (BTC) by investing in MicroStrategy
Sources: MicroStrategy, SEC
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