MicroStrategy shares rise 10% after $2 billion Bitcoin acquisition at $74.4k

Shareholders benefit from Bitcoin strategy as MicroStrategy's average acquisition cost remains significantly below market value.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

MicroStrategy has announced a major Bitcoin acquisition, securing approximately 27,200 BTC for $2.03 billion between Oct. 31 and Nov. 10, according to a Nov. 11 statement.

This purchase comes amid a broader crypto market rally that has seen Bitcoin price rally to a new all-time high of more than $82,000.

However, the Michael Saylor-led company stated that it purchased each Bitcoin in its latest purchase for $74,463.

$20 billion in Bitcoin

MicroStrategy said its total Bitcoin holdings currently stand at 279,420 BTC, which represents about 1.3% of Bitcoin’s circulating supply. To date, the firm has made a total Bitcoin investment of $11.9 billion, with an average acquisition cost of $42,692 per BTC, accounting for fees and expenses.

At current market values, these holdings are worth over $20 billion, leaving the company with an unrealized gain of more than $10 billion, as per Saylortracker’s data.

MicroStrategy’s Bitcoin yield—an indicator of returns from its BTC holdings—was recorded at 7.3% from Oct. 1 to Nov. 10. The metric stands at 26.4% year-to-date.

Bitcoin yield highlights the company’s ongoing focus on enhancing shareholder value through its Bitcoin investment strategy.

Following the announcement, MicroStrategy shares rose by roughly 10% in pre-market trading, reaching $270, according to Google Finance data.

How this purchase was funded

MicroStrategy said it utilized funds raised through stock sales under two recent agreements to purchase these BTC.

In August 2024, the company stated that it entered a $2 billion sales agreement with several financial firms, including TD Securities, The Benchmark Company, and BTIG, allowing for the issuance and sale of Class A common stock as needed.

On Oct. 30, 2024, MicroStrategy also entered into a $21 billion sales agreement with additional agents such as Barclays Capital, Cantor Fitzgerald, and Mizuho Securities. As of Nov. 10, the company had sold a total of 7,854,647 shares, raising around $2.03 billion in net proceeds.

So, with the August agreement nearly depleted, future stock sales are set to proceed under the October agreement.

Meanwhile, despite the potential for share dilution from these sales, each outstanding MicroStrategy share still represents 0.00124464 BTC, with approximately 197.3 million shares in circulation, according to MSTR-BTC tracker data.

Bitcoin price fell 0.5% as the news broke, falling from $82,300 to $81,800 as of press time.

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