MicroStrategy buys 15,350 more Bitcoins, BTC yield hits 72% YTD

MicroStrategy has done it again. Between December 9 and December 15, 2024, the company purchased 15,350 bitcoins for $1.5 billion in cash. This brings their total Bitcoin holdings to a jaw-dropping 439,000 BTC, now worth billions more in market value.

The acquisition was funded through the sale of 3.88 million shares of its class A common stock. This latest Bitcoin haul comes at an average purchase price of $100,386 per coin, fees included. Overall, MicroStrategy has spent $27.1 billion to build its BTC reserves, which now average out at $61,725 per coin.

How MicroStrategy funds its Bitcoin obsession

The funding for these massive Bitcoin purchases comes from an October 30 sales agreement with many heavy-hitter financial institutions, including TD Securities, Barclays, and Cantor Fitzgerald. The agreement allows MicroStrategy to issue and sell up to $21 billion worth of its class A common stock over time.

By December 15, the company had already sold shares worth $1.54 billion, leaving $7.65 billion in available shares for future sales. These sales have proven to be a reliable pipeline for fueling MicroStrategy’s Bitcoin buying spree.

It’s actually a calculated bet. MicroStrategy’s leadership, including co-founder and executive chairman Michael Saylor, views Bitcoin as the ultimate reserve asset, superior to cash or traditional investments.

The company’s commitment to Bitcoin is unmatched, and its aggressive stock issuance strategy is a reflection of its unrelenting belief in the crypto’s long-term value.

The company’s decision to execute a 10-for-1 stock split earlier this year also plays into this strategy. By increasing accessibility for retail investors, MicroStrategy made its shares more liquid and, by extension, enhanced its ability to raise capital for Bitcoin acquisitions. The split, adjusted all historical share counts and equity award figures, aligning them with the new structure.

BTC yield: A key metric in MicroStrategy’s strategy

MicroStrategy’s BTC yield is a metric that sets it apart from other corporate Bitcoin holders. The company uses this key performance indicator (KPI) to measure the percentage change in Bitcoin holdings relative to its assumed diluted shares outstanding.

From October 1 to December 15, MicroStrategy’s BTC yield climbed by 46.4%. The year-to-date figure is a stunning 72.4%. What does this number really mean? In simple terms, it tracks how much Bitcoin the company acquires for every share issued, showcasing the efficiency of its strategy.

Though BTC yield isn’t perfect. It doesn’t consider liabilities like debt, nor does it account for the trading price of MicroStrategy’s stock. Still, it’s a creative way for the company to evaluate its performance and give Bitcoin-focused investors something unique to consider.

The company acknowledges that BTC yield can fluctuate based on external factors. For instance, the redemption of 6.125% senior secured notes earlier this year boosted yield figures by reducing liabilities. On the flip side, future redemptions or stock sales could drive the metric down.

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