MicroStrategy: Part 2 of answering questions about crypto accounting, cashflow, CAMT, convertibles
This is a team effort between The Dig and Deep Quarry to go deeper into the questions behind the headlines.
In Part 2 today we’ll answer more detailed questions about the complexity and politics of MicroStrategy’s tax situation, what its legacy software business can contribute to the MicroStrategy’s plans, the challenges of MicroStrategy’s convertible debt strategy, and what comes next.
In Part 1 we answered questions about the impact of crypto asset fair value accounting, its impact on MicroStrategy’s tax liabilities, and why MicroStrategy didn’t early adopt the fair value accounting standard that would add billions to its bottom line.
Every day a new curve is added to this rollercoaster ride.
MicroStrategy Snaps Up More Bitcoin. How It Plans to Finance Future Purchases.
By Mackenzie Tatananni Jan 27, 2025, 12:14 pm EST
MicroStrategy said it has bought even more Bitcoin, and that it would sell stock to raise capital and fund future purchases of the cryptocurrency.
MicroStrategy’s latest purchase brings its total holdings to more than 470,000 Bitcoins, the software company said in a filing with the Securities and Exchange Commission.
Between Jan. 21 and Sunday, MicroStrategy acquired around 10,107 Bitcoins for $1.1 billion in cash, or roughly $105,596 per Bitcoin, the company said. It now owns around 471,107 Bitcoins, acquired for $30.4 billion.
The company also announced that it intends to offer, in a public offering, 2.5 million shares of its “perpetual strike preferred stock.” The net proceeds from the offering will go toward “generate corporate purposes” including working capital and the acquisition of more Bitcoin.
The stock was down for the day on the news.
After the paywall we’ll answer the questions about why MicroStrategy’s strategy is so risky, for everyone involved, and why MicroStrategy is now shifting its focus to offer equity to fund CEO Michael Saylor’s bitcoin crusade instead of convertible debt.