Bitcoin Purchase Announcement: Strategy Makes Shocking Investment
Keep Up with U.TODAY on Google News: Strategy Scoops Up 1,895 More Bitcoins
In a routine but engaging move, business intelligence powerhouse Strategy has added yet another 1,895 Bitcoins to its hoard, shelling out a cool $180 million in the process. The acquisition, revealed on Monday, has Michael Saylor, the firm's Executive Chairman, hinting at the purchase a day earlier through social media posts.
As of now, CoinGecko data shows Bitcoin trading slightly above $94,000, after taking a modest 1.5% dip in the past 24 hours.
Following this recent purchase, Strategy's pre-market shares are shedding 3%, having gained more than 3% on Thursday. You may recall that U.Today previously reported Strategy's $1.4 billion Bitcoin haul on Monday, with the firm liquidating its entire $21 billion at-the-money (ATM) offering within a couple of months.
Last week, Strategy upped its capital-raising game by announcing intentions to double the amount it intends to gather for Bitcoin acquisitions, setting an ambitious target of a staggering $84 billion. To fuel this mission, the company has reinstated its $21 billion equity offering program and doubled its debt purchase program to an astounding $42 billion, leaving $14.6 billion still available.
The Achilles' Heel of Strategy?
Alarm bells were raised last month by Matthew Siegel, head of digital research at VanEck, who pointed out that a collapsing premium could be the biggest risk for Strategy and its imitators.
In short, as long as shares are trading at a premium, the company can buy Bitcoin and create a yield. However, if shares start trading at a discount, this will demolish the Bitcoin yield engine, as financing new Bitcoin purchases becomes a value-draining move for shareholders.
Bitcoin News
Strategy News
Michael Saylor
Strategy's recent acquisition of 1,895 Bitcoins for $180 million indicates a heavy investment in the crypto market, demonstrating the company's commitment to finance and technology.
Michael Saylor's social media posts hinting at the purchase a day before the announcement suggest a forward-thinking approach to crypto trading and business strategy.
However, the potential risk of shares trading at a discount, as highlighted by Matthew Siegel, could pose a significant challenge to Strategy's Bitcoin yield engine and overall business model.
