MicroStrategy adds to Bitcoin stake despite steep loss

The firm’s Bitcoin holdings have declined 45% from their average purchase price of $30,397.

According to a new filing with the U.S. Securities and Exchange Commission, software analytics firm MicroStrategy said that it acquired 2,395 Bitcoins (BTC) at an average price of $17,181 for a total of $42.8 million during the period Nov. 1 and Dec. 21. Subsequent to the development, the company sold 704 BTC at $16,776 per coin for a total of $11.8 million on Dec. 22. On Dec. 24, MicroStrategy acquired approximately 810 BTC for $13.6 million in cash, at an average price of $16,845 per coin. 

In a Bloomberg interview published earlier this year, CEO and blockchain personality Michael Saylor told reporters: “We’re only acquiring and holding Bitcoin, right? That’s our strategy. We’re not sellers.” Today’s filing represents the first publicly reported BTC sale by the firm in recent memory. In supporting the decision, MicroStrategy wrote: 

“MicroStrategy plans to carry back the capital losses resulting from this transaction against previous capital gains, to the extent such carrybacks are available under the federal income tax laws currently in effect, which may generate a tax benefit.”

After the aforementioned transactions, MicroStrategy now holds 132,500 BTC with an average purchase price of $30,397 and total book value of $4.03 billion. However, their market value has declined to $2.20 billion at the time of publication.

MicroStrategy previously disclosed on Sept. 9 that the company may issue or sell up to $500 million worth of common stock. Between Oct. 1 and Dec. 27, the company sold 218,575 units for total net proceeds of $46.4 million. Michael Saylor, the firm’s CEO, is currently embroiled in a lawsuit brought by the DC Attorney General on allegations of tax evasion.

MicroStrategy has increased its #Bitcoin Holdings by ~2,500 #BTC. As of 12/27/22 @MicroStrategy holds ~132,500 bitcoin acquired for ~$4.03 billion at an average price of ~$30,397 per bitcoin. $MSTRhttps://t.co/lcMeULcGQk

— Michael Saylor⚡️ (@saylor) December 28, 2022