Key Highlights
- Strategy bought 1,142 Bitcoin for about $90 million between February 2 and February 8.
- Total bitcoin holdings now stand at 714,644 BTC, worth around $49 billion at current prices.
- CEO Phong Le recently said Bitcoin would need to drop to $8,000 for five to six years before the company faces serious debt issues.
Strategy announced a new Bitcoin (BTC) purchase in a regulatory filing on Monday, continuing its long-running accumulation of the cryptocurrency despite recent market weakness. The U.S.-based Bitcoin treasury company said it acquired additional Bitcoin earlier this month using proceeds from stock sales, adding to what is already the largest corporate Bitcoin holding.
According to an 8-K filing with the U.S. Securities and Exchange Commission (SEC), Strategy bought 1,142 bitcoin between February 2 and February 8 for about $90 million. The average purchase price was $78,815 per bitcoin.
Strategy funds new purchase with stock sales
The filing shows the company used funds raised through its at-the-market equity program, selling 616,715 shares of its Class A common stock, MSTR, for roughly $89.5 million during the period. As of February 8, the company said it still had about $7.97 billion worth of shares available for future issuance under the program.
With the latest purchase, Strategy’s total Bitcoin holdings rose to 714,644 BTC. The company has spent approximately $54.4 billion in total to acquire its bitcoin stash, including fees and related expenses.
The average price across all purchases now stands at $76,056 per bitcoin. At current market prices, the holdings are valued at around $49 billion, leaving the position at an unrealized loss following the recent bitcoin pullback.
Michael Saylor signals the purchase ahead of filing
Michael, the company’s co-founder and executive chairman, had already signaled the purchase before it was officially announced.
On Sunday, he shared an update on the company’s Bitcoin tracker and wrote, “Orange Dots Matter.” Saylor has often used similar posts to hint at Bitcoin purchases before the formal filing.
The timing suggests that Strategy bought the Bitcoin earlier in the week, before the market sell-off. During that period, Bitcoin dropped to a low of $60,000 at one point before recovering. Strategy’s stock (MSTR) also went as low as $102 on Friday before surging back up. At the time of writing, Bitcoin was trading for $69,395, down 2.62% from the previous day.
Strategy addresses downside risk
The disclosure comes shortly after Strategy reported a steep fourth-quarter loss, as falling Bitcoin prices erased tens of billions of dollars from the value of its balance sheet.
During the company’s earnings call, CEO Phong Le addressed concerns about debt and leverage. He said Bitcoin would need to fall to $8,000 and remain at that level for five to six years before the company would face serious challenges meeting its convertible debt obligations.
“In the extreme downside, if we were to have a 90% decline in bitcoin price, and the price was $8,000, that is the point at which our bitcoin reserve equals our net debt,” Le said on the call.
Also Read: Strategy Shares Surge 26% as Bitcoin Rebounds to $70K
