MicroStrategy (MSTR), a software developer that has become a bitcoin (BTC) vault business, plans to sell up to $500 million in stock to fund more purchases of the cryptocurrency.
A Friday filing with the U.S. Securities and Exchange Commission revealed the stock offering, which will be for “general corporate purposes, including acquiring bitcoin.”
The timing stands out as it’s the first tangible sign that founder Michael Saylor, who recently stepped down as CEO to become executive chairman and focus on buying bitcoin, is really not giving up on his bold plan to turn MicroStrategy into a crypto proxy. Since 2020, he has used money from stock and bond offerings to buy around 130,000 bitcoins, worth more than $2 billion.
As a result, MicroStrategy shares became pegged to the price of bitcoin, resulting in a $1.2 billion loss on bitcoin betting given this year’s drop. But stocks jumped 12% on Friday as bitcoin jumped nearly 10%. The stock, however, fell about 1.5% in after-hours trading following the announcement of the stock offering, which will dilute the value of existing shares.
Cowen and BTIG, two of the most prominent investment banks that cover crypto-related stocks, are leading the stock offering.
Saylor and MicroStrategy were recently sued by the District of Columbia for allegedly evading taxes on Saylor’s income in the District.
Read more: Michael Saylor lost big in the Dot-Com bubble and Bitcoin crash. Now he’s aiming to bounce back again
Oliver Knight and Aoyon Ashraf contributed reporting.