Microstrategy In Talks To Purchase Bitcoin
Company to Sell Half A Million Dollars Worth Of Stock
One of the most significant institutional Bitcoin investors is MicroStrategy. Michael Saylor, the company’s chairman and a Bitcoin maximalist, has sworn not to sell the company’s Bitcoin assets despite the sharp decrease in Bitcoin prices. Since hitting an all-time high in November of last year, the value of Bitcoin has decreased by around two-thirds.
MicroStrategy filed a document with the US Securities and Exchange Commission on Friday (SEC). MicroStrategy disclosed in the filing that it intends to sell up to $500 million worth of shares in order to fund its cryptocurrency acquisitions. The filing is a good indicator for the Bitcoin community that MicroStrategy is not giving up on its Bitcoin acquisition plan because it states that the stock sale will be used for “general company objectives, including the purchase of Bitcoin.”
Saylor, who left his position as CEO a few months ago, is now MicroStrategy’s executive chairman. The software business hasn’t bought any fresh Bitcoin since leaving. Since 2020, MicroStrategy has been buying a lot of Bitcoin to position itself as a crypto proxy. Since 2020, the business has been purchasing over 130,000 Bitcoin, worth over $2 billion, with money obtained through stock and bond issues.
Due to the company’s significant Bitcoin holdings, changes in the price of Bitcoin are reflected in the stock’s performance. Due to the poor performance of Bitcoin this year, MicroStrategy has lost $1.2 billion on its investment. The shares of MSTR have been impacted by the falling Bitcoin prices.
As Bitcoin rebounded by almost 10% on Friday, the shares increased by double digits. However, following the public disclosure of this stock offer, the after-trading hours display a 1.5% fall. The value of the current shares will likely decrease as a result of the stock offering. The two top investment banking behemoths that deal with stocks connected to cryptocurrencies, Cowen and BTIG, are spearheading the MicroStrategy stock offering.
MicroStrategy is being sued for tax fraud.
After being accused of tax fraud, Saylor and MicroStrategy also ended up on the wrong side of the law. Despite having lived in the region for more than ten years, Saylor is being sued in the District of Columbia for failing to pay income tax.
The Attorney General’s office claims that MicroStrategy is also being sued for its assistance in Saylor’s tax evasion. In a tweet announcing this action, Attorney General Karl A. Racine said that Saylor is legally obligated to pay hundreds of millions of dollars in taxes for money he received while he was a resident of Washington.
Additionally, according to the Attorney General’s office, Saylor failed to pay the district nearly $25 million in taxes. Taxes and other payments, such as civil fines, fees, and expenditures, as well as damages, are all being sought and recovered by the office.
Racine claimed in a tweet that the action was the first to be brought in the district under the recently amended False Claims Act, which encourages whistleblowers to expose citizens who violate tax rules.