MicroStrategy repays Silvergate, buys 6.5K BTC

MicroStrategy, a prominent Bitcoin investor and business intelligence company, is increasing its BTC holdings in response to the current cryptocurrency market bounce. Michael Saylor, co-founder and former CEO of MicroStrategy, announced on Twitter on March 27 that the company had returned its $205 million debt to Silvergate.

Saylor emphasized that MicroStrategy returned the Silvergate loan at a 22% discount, citing an 8-K statement with the United States Securities and Exchange Commission.

According to the former CEO, the corporation also purchased a considerable quantity of bitcoin, acquiring 6,455 BTC for $150 million, or an average price of $23,238 per coin as of March 23. MicroStrategy acquired its most recent batch of bitcoin between February 16 and March 23, 2023, according to the filing.

Saylor said that the acquisition brought MicroStrategy’s total Bitcoin holdings to 138,955 BTC, purchased for $4.1 billion at an average price of $29,817 per coin.

MicroStrategy, a subsidiary of MicroStrategy, received a $205 million term loan from Silvergate Bank in March 2022 under the Silvergate Exchange Network Leverage program. The loan was secured by Bitcoin belonging to MicroStrategy, and its maturity date was set for March 23, 2025.

The terms of the credit agreement required MicroStrategy to maintain a loan-to-collateral value ratio of less than 50%. MacroStrategy and Silvergate entered into a prepayment, waiver, and payback credit and security agreement on March 24, 2023, with MacroStrategy prepaying Silvergate about $161 million in full repayment.

The petition states, “Following Silvergate’s receipt of the payment amount, the credit arrangement was dissolved and Silvergate renounced its security interest in all of MacroStrategy’s assets collateralizing the loan, including the Bitcoin that was acting as collateral.”

MicroStrategy also disclosed in the filing that it has agreed with Cowen & Company and BTIG to sell class A common shares for a total of $500,000,000. MicroStrategy issued and sold a total of 1,348,855 shares under the terms of the sales agreement, resulting in approximately $339 million in net proceeds for the company.

 

MicroStrategy’s most recent Bitcoin purchase is supposedly the first of its kind in 2023. MicroStrategy acquired 2,395 bitcoins at an average price of $17,181 between November 1 and December 21, 2023, for a total of $42.8 million.