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Strategy (MSTR) Buys $2.4 Billion Worth of Bitcoin Using Preferred Stock Proceeds

Strategy (MSTR) Buys $2.4 Billion Worth of Bitcoin Using Preferred Stock Proceeds

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Strategy (MSTR) Buys $2.4 Billion Worth of Bitcoin Using Preferred Stock Proceeds

Strategy (MSTR), the largest corporate owner of Bitcoin(BTC) in the world, has added to its cryptocurrency holdings.

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The company led by Chairman Michael Saylor said it has acquired an additional $2.4 billion worth of BTC using the funds raised from the sale of its new preferred stock. Strategy, formerly known as MicroStrategy, sold nearly $2.5 billion worth of preferred stock in recent weeks.

The preferred stock, which is called “stretch” by some investors, was more popular than expected. Initially Strategy planned to only sell $500 million worth of preferred stock, but upped the amount due to strong demand from investors.

Buying BTC

Strategy’s preferred stock is scheduled to begin trading on the Nasdaq (NDAQ) exchange on July 30 under the ticker symbol “STRC.” The stock promises to deliver a hefty dividend to shareholders, with the yield initially set at 9%. While some analysts have questioned the sustainability of such a high yield, it appears to be enough to attract many individual retail investors.

With the proceeds from the preferred stock sale, Strategy bought an additional 21,021 Bitcoin at an average price of $117,256, according to a press release. That brings Strategy’s total BTC holdings to 628,791, worth nearly $74 billion at current market prices. MSTR stock has risen nearly 40% this year.

Is BTC a Buy?

Most Wall Street firms don’t offer ratings or price targets on cryptocurrencies such as Bitcoin, so we’ll look instead at its three-month performance. As one can see in the chart below, the price of BTC has risen 22.77% in the last 12 weeks.

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