MicroStrategy to Sell Up to $500 Million in Shares; Proceeds Could Be Used to Buy Bitcoin

MicroStrategy has filed to sell up to $500 million of Class A common stock. The proceeds could be used to purchase bitcoin, according to an amendment to the prospectus dated September 9, 2022.

According to the document, MicroStrategy has entered into an agreement with investment bank Cowen and Company and BTIG, which will serve as the financial intermediaries for the offering. The stock to be sold is Class A common stock at a price of $0.001 per share.

“We intend to apply the net proceeds from the offering to corporate purposes, including the purchase of bitcoin, unless otherwise indicated in the applicable supplement to the prospectus. We have not determined the amount of net proceeds that would be used for any particular purpose,” — the statement said.

The company noted that the amount of bitcoin to be purchased will depend on market conditions.

As of writing, bitcoin trades near $21,450. Over the past week the asset has risen about 8%, according to CoinGecko.

MicroStrategy’s shares rallied on the news. At the close of trading on September 9, the company’s securities rose by nearly 12%.

Earlier in August 2022, MicroStrategy founder Michael Saylor left the role as chief executive of the company to focus on “innovation and a long-term corporate strategy,” which envisions further purchases and holding of bitcoin.

In the same month, the District of Columbia (USA) filed a lawsuit against MicroStrategy and Saylor. The prosecutor accused them of fraud aimed at evading taxes.

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