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MicroStrategy Buys Additional Bitcoins; Shares Jump 4.9%

Business intelligence and software services provider MicroStrategy Inc. (MSTR) has acquired an additional 7,002 bitcoins for an aggregate price of $414.4 million.

MicroStrategy CEO, Michael Saylor, is a big believer in the cryptocurrency’s potential, and has made it a mission to add more bitcoins to the company’s coffers. Following the news, MSTR shares jumped 4.9%, closing at $695.48 on November 29.

Bitcoin Addition

Taking advantage of the current dip in the currency’s price due to the ongoing Omnicron scare, MSTR bought 7,002 bitcoins in cash for an average price of $59,187 per bitcoin, inclusive of fees and expenses. The bitcoin currency, BTC/USD closed down 2.5% at $56,409.50 on November 29.

The company filed an 8-k filing with the Securities and Exchange Commission (SEC). The filing states that in the fourth quarter to date (between October 1, 2021, and November 29, 2021), MSTR purchased the aforementioned bitcoins for an aggregate price of $414.4 million.

Furthermore, the company disclosed that as of November 29, it held a total of 121,044 bitcoins worth $3.57 billion. The bitcoins were bought at an average price of approximately $29,534 per bitcoin, inclusive of fees and expenses.

Share Sale Agreement

Besides the bitcoin purchase, the company also announced that during the same period of the fourth quarter till date, it has issued and sold around 571,001 shares of its Class A common stock for an average price of $732.16. The net proceeds from the sale totaled approximately $414.4 million.

The sale is in accordance with the company’s announcement on June 14, 2021, regarding the Open Market Sale Agreement with Jefferies LLC. The agreement covers the sale of MSTR’s Class A common stock par value $0.001 per share, for an aggregate price of up to $1.0 billion.

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Analysts’ Consensus

With 3 unanimous Buys, the MSTR stock commands a Strong Buy consensus rating. The average MicroStrategy price target of $910.50 implies 30.9% upside potential to current levels. Shares have exploded 102.9% over the past year.

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