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MicroStrategy Raises US $2 Billion to Buy Bitcoin as Questions Emerge Over Cash Flow
- The biggest Bitcoin maximalist of Bitcoin maximalists, Michael Saylor and MicroStrategy, are raising money once more to purchase US $2b of Bitcoin.
- The company already holds nearly US $15b of the asset, making its portfolio almost 15x larger than the next biggest among public companies.
- Despite the growth of BTC in the past quarter, MicroStrategy’s revenue has consistently fallen, resulting in a horror day on the markets for its stock, MSTR.
- MSTR is down more than 6% in under a day of trading.
No… it couldn’t be. Surely Michael Saylor and MicroStrategy aren’t buying more Bitcoin…
The world’s largest institutional holder of BTC is raising money to, yet again, buy Bitcoin. The romantic pairing of BTC and MicroStrategy has seen the latter’s portfolio climb to US $14.8b (AU $22.8b). By comparison, the next largest company holdings of Bitcoin is “only” worth US $1.3b (AU $2b).
But apparently, this level of BTC ownership is not enough for supreme maximalist Saylor and co. The team has registered for a new equity program that will see MicroStrategy raise US $2b (AU $3.08b) to spend on… you guessed it – Bitcoin.
Related: Senator Lummis Presents Official Strategic Bitcoin Reserve Bill
MicroStrategy Financial Results Worse than Expected for Past Quarter
Despite the continued love story between MicroStrategy and Bitcoin, things may not be as rosy within the company as they appear.
Some investors have become concerned about the business’ cash flows in the current tech climate and stagnating revenue.
Those fears became realised overnight, as MicroStrategy released their Q2 financial results, with the company posting a loss.
The market did not take too kindly to the results, even with many in the industry already flagging a potential slowdown of income. The Q2 statement was worse than expected, and MicroStrategy’s stock (ticker: MSTR) fell more than 6% in less than a day.
Analyst at TD Cowen, Lance Vitanza, echoed the ongoing concerns, telling Bloomberg:
…I think the big question is just making sure that their cash flows are going to be sufficient to cover the incremental interest expensive associated with the convertible debt they’ve issued…If my estimates are right, they don’t have a lot of room for error if their software business underperforms.
Lance Vitanza, TD Cowen, Related: Aussie Analyst Pav Hundal Reveals Outlook for Bitcoin, Ethereum, Solana
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
