We all know MicroStrategy, yes, the giant in the software industry in Silicon Valley. The company is making news for various reasons and of late for its plan to buy more Bitcoins. The last quarter has been in planning and discussion about digital currency and treasury management. In the last quarter, the company embarked on its new announcement about procuring more digital coins.
They are now planning to double the number of Bitcoin they have at the moment in their ownership. The key reason behind this decision is to trigger the initial investment. The company wants to transform the treasury money over a store value asset that will evade the issues of inflation. Having its head office in Virginia is set to fetch 550 Million USD in the coming five years. It would help the investors to plan their offerings for buying more BTCs.
The Key Takeaways
Now, the company plans to pay an annual interest rate of around 0.75 percent in the early days of 2021. It was not the case earlier in December. They plan to raise huge money for this cause that sums to around 537 Million USD for all the required expenditures and accounting the same. Now, let’s check the key takeaways:
- The company is seen giving 550 Million USD to convert the notes into funds and add the purchase of Bitcoins.
- The Bitcoin purchase of the company witnessed last year seemed like a big price bump.
- Several commentators and analysts feel that the company’s primary business idea is to check for converts and make it also an asset management firm dealing with bitcoin.
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The Company’s Bitcoin Bet
It is the first time in history for any publicly listed group to plan to procure Bitcoin. They are planning to raise massive money from the market, and the core purpose for the same is to buy Bitcoin in a big way. MicroStrategy has all good reasons to carry out this thing. Once you start buying it in the last quarter, you get 475 Million USD worth of digital currencies.
The company’s share price has not seen reasonable amounts of change, making it to 130% of the hike, taking the peak of 342 USD. As of now, we see the shares of the tread are now reaching 286 USD. Many more companies in the market come along with the initial investment worth 475 Million USD to procure Bitcoin valued at 740 Million USD.
Therefore, it has become tough to find out the sudden rise of MicroStrategy and its stock in the market dealing with their business and finance. One can find declining revenue in the company that has helped to gain a good amount of profits to secure a good number of years in the recent time.
The announcement to invest in procuring Bitcoin was planned in the last quarter, and since then, the buzz around this news has been heart. It has come under the company’s customer activity head, and we see them signing big claims to the CFO of the software giant. Also, the finance head of the company has formed a team to work on this venture.
They will study the Bitcoin bum and then propose a plan to invest. They will take time to chalk a proper strategy of treasury management. During the call, the company’s CEO compared Bitcoin to not less than gold and even other assets that people own in this challenging time. He went on to call Bitcoin not less than a software network, which can store high monetary value and energy.
Is MicroStrategy still a software company or an assets management one?
With this decision, confusion among the stakeholders and others is inevitable. They are now talking about converting Bitcoin into assets that would help sustain the market differently. So, will the company remain the core player in the software industry or plan to take a paradigm shift towards asset management in the coming years. However, looking in terms of revenue and profits, this decision seems good from an investor’s point of view. After all, they have more opportunities to earn and win profits from the company. So for them, it hardly matters whether MS remains a software company or asset management company. What matters is their profit, which they will get in a big slab.