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MicroStrategy Plans to Buy More Bitcoin, Files to Sell Up to $500M of Stock

MicroStrategy Plans to Buy More Bitcoin, Files to Sell Up to $500M of Stock

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MicroStrategy is one of the largest institutional investors in Bitcoin. Michael Saylor, the chairman of the software development company, is a Bitcoin maximalist and has vowed not to sell the company’s Bitcoin shares despite the significant drop in Bitcoin prices. Bitcoin has lost about two-thirds of its value since hitting an all-time high in November last year.

MicroStrategy is seeking an equity offering of up to $500 million

MicroStrategy made a filing with the US Securities and Exchange Commission (SEC) on Friday. In the filing, MicroStrategy revealed plans to sell up to $500 million in shares to support cryptocurrency purchases.

In the filing, MicroStrategy reveals that the stock offering would be used for “general corporate purposes, including the acquisition of Bitcoin.” The filing is a positive sign to the Bitcoin community that MicroStrategy is not abandoning its Bitcoin acquisition strategy.

Saylor stepped down as CEO a few months ago and is now the CEO of MicroStrategy. Since the separation, the software company has not made any new Bitcoin purchases.

MicroStrategy has been buying Bitcoin since 2020 to become a crypto proxy. As of 2020, the company has used funds raised from stock and bond offerings to purchase approximately 130,000 Bitcoins, valued at over $2 billion.

Following the company’s extensive Bitcoin holdings, its shares perform in a manner that mirrors Bitcoin’s price movements. Bitcoin hasn’t fared well this year, with MicroStrategy taking a $1.2 billion loss on its holdings. The fall in Bitcoin prices has affected MSTR shares.

Stocks rose by double digits on Friday as Bitcoin rallied about 10 percent. However, after-hours trading shows a 1.5% drop after news of this stock offering became public. The share issue is expected to dilute the value of the existing shares.

The MicroStrategy stock offering is led by two leading investment banking giants that trade in crypto stocks; Cowen and BTIG.

MicroStrategy sues for tax evasion

Saylor and MicroStrategy have also found themselves on the wrong side of the law after being sued for tax fraud. Saylor has been sued in the District of Columbia for failing to pay income taxes despite having lived in the District for more than a decade.

by to the attorney general’s office, MicroStrategy has also sued for its role in helping Saylor avoid paying taxes. Attorney General Karl A. Racine tweeted about this lawsuit, saying that Saylor legally owes hundreds of millions of dollars in taxes on the e-income she earned while living in Washington.

The attorney general also says Saylor avoided paying the district more than $25 million in taxes. The Bureau will recover taxes and other payments, including damages, civil penalties, fees and costs.

In a Twitter post, Racine said the lawsuit was the first filed under the district’s recently amended false claims law, which encourages whistleblowers to report residents who are not complying with tax laws.



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