Michael Saylor, CEO of business data analytics firm MicroStrategy, announced Monday via a Twitter post and company presentation that the company purchased an additional 7,002 Bitcoin (BTC), worth about 414.4 million, at an average price of $ 59,187 per coin. MicroStrategy sold 571,001 shares of the company between October 1 and November 29 at $ 732.16 each, raising a total of $ 414.4 million in cash.
MicroStrategy has purchased an additional 7,002 bitcoins for ~ $ 414.4 million in cash at an average price of ~ $ 59,187 per #bitcoin. As of 11/29/21 we #hodl ~ 121,044 bitcoins acquired for ~ $ 3.57 billion at an average price of ~ $ 29,534 per bitcoin. $ MSTRhttps://t.co/OA8VWG1bZX
– Michael Saylor⚡️ (@saylor) November 29, 2021
As of Monday, the company now owns 121,044 BTC, worth up to $ 3.57 billion. It was acquired at an average price of USD 29,534 per currency and included the capital appreciation of previous currencies.
In August 2020, MicroStrategy stated that it would adopt Bitcoin as its treasury reserve asset, citing that the digital currency is a “trusted store of value” and an attractive investment with greater long-term return potentials than holding cash. In addition, the firm drew attention to the unprecedented stimulus that governments are printing to combat COVID-19 as a catalyst for potential inflation and the subsequent depreciation of fiat currencies. Since then, MicroStrategy has bought Bitcoin almost constantly every quarter.
Usually, everyday investors suffer losses when the price of Bitcoin goes down and gains when the price appreciates. However, that is not necessarily the case for MicroStrategy. According to the earnings conference transcript released last month, Phong Le, President and CFO of MicroStrategy, said that the company’s Bitcoin holdings are classified as “indefinite-lived intangible assets under applicable accounting standards.”. This means that at any time after its acquisition, if the fair value or market value of Bitcoin falls below its book value, the company will need to recognize impairment charges. These impairment charges can be used to legally offset your corporate tax liability.
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