MicroStrategy is one of the largest institutional bitcoin investors. The company’s chairman, Michael Saylor, is a bitcoin maximalist who decided not to sell the company’s bitcoin holdings despite the notable drop in the price. bitcoin price. Bitcoin has lost about two-thirds of its value since hitting an all-time high in November last year.
MicroStrategy files for up to $500 million stock offering
On Friday, September 9, 2022, MicroStrategy filed a request with the United States Securities and Exchange Commission (SEC). In it, MicroStrategy revealed its intention to sell up to $500 million worth of stock to complete its crypto purchase.
In the filing, MicroStrategy reveals that the stock offering would be used for “general corporate purposes, including the acquisition of Bitcoin.” This filing is a positive sign for the Bitcoin community that shows that MicroStrategy is not giving up on its BTC acquisition strategy.
Mr. Saylor stepped down as CEO a few months ago and now serves as executive chairman of MicroStrategy. Since his departure, the software publisher has not carried out any new bitcoin purchases.
Since 2020, the company has used funds raised from stock and bond offerings to purchase around 130,000 bitcoins, valued at over $2 billion.
Due to the size of its bitcoin holdings, the company’s stock moves in line with changes in the price of bitcoin. This year, BTC has not performed very well, and MicroStrategy suffered a $1.2 billion loss on its holdings. The decline in Bitcoin price affected MSTR shares.
On Friday, stocks made double-digit gains as Bitcoin rallied around 10%. After hours trading, a 1.5% drop was seen after news of this stock offering broke. The share offering is expected to dilute the value of existing shares.
The MicroStrategy equity offering is led by the two leading investment banks specializing in cryptocurrency-related equities, Cowen et BTIG.
MicroStrategy sued for tax evasion
Saylor and MicroStrategy are sued for tax evasion. Mr. Saylor is being sued in the District of Columbia for non-payment of income tax despite having resided in the area for more than ten years.
According the attorney general’s office, MicroStrategy is also being sued for helping Mr. Saylor avoid paying his taxes. Attorney General Karl A. Racine tweeted about the lawsuit, saying Saylor legally owes hundreds of millions of dollars in taxes for income he earned while living in Washington.