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Alternative Market Briefing

MicroStrategy buys $250m in bitcoin, making the crypto as a primary treasury reserve asset

Wednesday, August 12, 2020

Laxman Pai, Opalesque Asia:

Nasdaq-listed software firm MicroStrategy purchased 21,454 bitcoin on Tuesday, effectively pouring all $250 million of its planned inflation-hedging funds into the digital currency.

Disclosing its bitcoin buy alongside an equivalent stock buyback in a Tuesday Securities and Exchange Commission filing, MicroStrategy, a publicly-traded business intelligence firm worth over $1.2 billion, said the cryptocurrency provided a "reasonable hedge against inflation" in a press statement shared with CoinDesk.

The purchase of Bitcoin cryptocurrency was made pursuant to the two-pronged capital allocation strategy previously announced by the company when it released its second-quarter 2020 financial results on July 28, 2020.

The company addressed the first prong, which called for returning a portion of its excess cash to shareholders when it announced today that it had launched a cash tender offer for up to $250 million of MicroStrategy's class A common stock via a modified Dutch Auction offer.

"By acquiring 21,454 bitcoins, MicroStrategy addressed the other prong of its capital allocation strategy, which called for investing up to $250 million in one or more alternative investments or assets," said a press release.

"Our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders," said Michael J. Saylor, CEO, MicroStrategy Incorporated.

Michael adde......................

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