MicroStrategy, led by Michael Saylor, disclosed in an SEC filing that it has raised $46.6 million through the sale of shares since September 2022, when it entered into an agreement with underwriter Cowen and Co.for the sale of up to $500 million in common stock.
The company has updated its “use of proceeds” statement to include possible repayment of debts, such as its term loan with Silvergate Bank, which was taken out for $205 million in March 2022 and has become more expensive as the U.S. Federal Reserve has increased short-term interest rates, the company said in an SEC filing on Feb. 17.
The Silvergate loan has a prepayment penalty, which drops by half to 0.25% in March 2023 and matures in March 2025.
In the past, MicroStrategy has been known to pool funds from share sales to add to its bitcoin holdings, a strategy it believes outperforms other asset classes.
The founder of MicroStrategy is Michael J. Saylor. He co-founded the company in 1989 and has served as its Chairman and CEO since its inception.
He is widely known in the cryptocurrency industry as a vocal advocate for bitcoin and a major proponent of its potential as a store of value and hedge against inflation.
However, Saylor has also been very clear about his preference for bitcoin over other cryptocurrencies, including Ethereum. Saylor has been quoted as saying that Ethereum is a “science experiment” and that its use cases are limited compared to bitcoin’s potential.
While MicroStrategy has made a significant investment in Bitcoin, it has also more recently been involved in a project to create a Bitcoin Mining Council that aims to promote sustainable mining practices.
The SEC vs. Paxos: A deep dive into the implications of the lawsuit and its effects on stablecoins
The SEC’s notice to Paxos to stop minting BUSD could have longstanding implications on the crypto market. CryptoSlate’s new report explores the recent and potential consequences of enforcement action against Paxos.