Michael Saylor’s MicroStrategy Repays Silvergate Loan and Buys 6.5K BTC
MicroStrategy, a business intelligence firm and major Bitcoin (BTC) investor, is acquiring more BTC amid the recent upswing in the cryptocurrency market.
MicroStrategy co-founder and former CEO Michael Saylor took to Twitter on March 27 to announce that the firm has repaid its $205 million loan to Silvergate.
Citing an 8-K filing with the United States Securities and Exchange Commission, Saylor emphasized that MicroStrategy repaid the Silvergate loan at a 22% discount.
The company also bought a significant holding of Bitcoin, buying 6,455 BTC for $150 million, or at an average price of $23,238 per coin as of March 23, the former CEO said. According to the filing, MicroStrategy bought its last lot of Bitcoin between February 16, 2023 and March 23, 2023.
With the purchase, MicroStrategy has increased its total Bitcoin holdings to 138,955 BTC, purchased for $4.1 billion at an average of $29,817 per coin, Saylor said.
As previously announced, MicroStrategy’s subsidiary MacroStrategy received a $205 million term loan from Silvergate Bank under its Silvergate Exchange Network Leverage Program in March 2022. The loan was secured by certain Bitcoin owned by MacroStrategy and had a scheduled maturity date of March 23, 2025.
Under the terms of the credit agreement, MacroStrategy was required to maintain a loan-to-value ratio of less than 50%. On March 24, 2023, MacroStrategy and Silvergate entered into a Prepayment, Waiver and Disbursement to Credit and Security Agreement, with MacroStrategy voluntarily prepaying Silvergate approximately $161 million in full repayment.
“Upon Silvergate’s receipt of the disbursement amount, the credit agreement was terminated and Silvergate released its security interest in all of MacroStrategy’s assets as collateral for the loan, including the Bitcoin that served as collateral,” the filing said.
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In the filing, MicroStrategy also mentioned that the company entered into an agreement with two companies – Cowen and Company and BTIG – to sell their combined Class A shares worth $500,000,000. According to the most recent updates, MicroStrategy issued and sold a total of 1,348,855 shares under the sales agreement for aggregate net proceeds to MicroStrategy of approximately $339 million.
The latest Bitcoin acquisition by MicroStrategy is apparently the first such transaction so far in 2023. The previous purchase took place in late December 2023, where MicroStrategy bought 2,395 BTC at an average price of $17,181 for a total of $42.8 million in the period from November 1 and December 21.
MicroStrategy did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.
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