- MicroStrategy diluted shareholders by $285.7 million to purchase Bitcoin at $82,618 per coin, with no BTC accretion for shareholders after fees and expenses.
- The company made purchases between April 7-13 at prices in the top third of the trading range, missing opportunities to buy during last week’s market dip.
- Critics point out that MicroStrategy appears to have paid 4.2% above the highest volume-weighted average price (VWAP) available on Coinbase during the purchasing period.
MicroStrategy announced this morning that it has purchased $285.8 million worth of Bitcoin at an average price of $82,618 per coin, according to an SEC filing. The purchase, occurring between April 7-13, effectively diluted MSTR common shareholders by $285.7 million, with shareholders receiving no Bitcoin accretion to their shares after deducting fees and expenses.
After pausing purchases during the first week of April and warning of potential Bitcoin sales next year, MicroStrategy resumed buying during a week when Bitcoin traded between $74,434 and $86,084. The company chose to deploy over $250 million at a price point ($82,618) that fell within the top third most expensive part of that range.
Market analysis suggests the timing was questionable, as Bitcoin traded primarily in the lower third of the price range during the purchasing period. Donald Trump‘s announced tariffs sent global markets into turmoil, with the VIX volatility index spiking above 57 and Bitcoin falling to its worst price of the year. Shareholders had hoped founder Michael Saylor would capitalize on these lower prices.
Saylor Continues Premium Price Strategy
Saylor has previously embraced paying premium prices for Bitcoin, stating on February 20, 2024: “I’m going to be buying the top forever.” The company’s total average purchase price for all Bitcoin holdings now stands at $67,556.
The purchase announcement triggered disappointment across social media. Experienced investors examined Coinbase VWAP (volume-weighted average price) charts that reportedly showed prices never exceeding $79,220 for the entire week, making MicroStrategy’s average purchase price approximately 4.2% higher than what appeared available.
Market Pricing Transparency Questions
Critics highlighted charts showing Saylor’s purchase price nearly topped the range of much lower prices at which the company could have bought. However, since MicroStrategy typically uses Coinbase’s OTC (over-the-counter) desk for large purchases, exact pricing data isn’t publicly available.
Coinbase OTC operates as a private dealer for large off-market spot transactions that don’t appear in standard charting platforms like TradingView. While it’s technically impossible to confirm whether MicroStrategy actually overpaid, the week’s price chart showing extended periods below $80,000 raises questions about the timing of these purchases.
Despite these concerns, MicroStrategy maintains its aggressive Bitcoin acquisition strategy as part of its long-term corporate treasury approach.
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