MicroStrategy converts $250M cash holdings to bitcoin

Tysons software company also offering $250M of its common stock

Published August 11, 2020 by Sydney Lake

Tysons-based business software company MicroStrategy Inc. announced Tuesday it has converted $250 million from its cash holdings into more than 21,000 bitcoins.

The company will keep its bitcoin holdings on its corporate treasury reserve — which MicroStrategy CEO Michael J. Saylor said in a statement will be the the principal holding in its treasury reserve strategy. MicroStrategy also announced Tuesday it will offer $250 million of its common stock.

“Our investment in bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders,” Saylor said in a statement. “This investment reflects our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

Following the company’s bitcoin purchase announcement Tuesday, its stock price jumped by nearly 10%, according to reports.

“Our decision to invest in bitcoin at this time was driven in part by a confluence of macro factors … including … the economic and public health crisis precipitated by COVID-19, unprecedented government financial stimulus measures including quantitative easing adopted around the world, and global political and economic uncertainty,” Saylor said in a statement. “We believe that, together, these and other factors may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types, including many of the assets traditionally held as part of corporate treasury operations.”

MicroStrategy employs approximately 2,400 people and offers business data analytics software.