MicroStrategy has bought more than 6,000 bitcoins after fully satisfying Silvergate’s massive debt obligations.
MicroStrategy Incorporated (NASDAQ:MSTR) recently increased its holdings of Bitcoin (BTC) after paying off a recent loan from Silvergate Bank (NYSE:SI). According to reports, the BTC-loving business intelligence firm has purchased an additional 6,455 Bitcoin for $150 million. The purchase, which also translates to an average price of $23,238 per token, brings MicroStrategy’s total holdings to 138,955 BTC. The company’s Bitcoin cache is worth $4.1 billion with an average of $29,817 per token.
MicroStrategy’s recent Bitcoin purchase comes in the midst of an ongoing recovery in the cryptocurrency market. Shares of the company were up 0.9% in pre-market trading today, March 27.
CEO Michael Saylor sheds more light on loan repayment and Bitcoin development
Today, Michael Saylor, co-founder of mobile software and cloud-based services, announced that Microstrategy has repaid its $205 million Silvergate loan. According to Saylor, the former CEO of MicroStrategy, the company repaid the failed bank’s large loan at a 22% discount. By paying back the two-year Silvergate loan, MicroStrategy also released 34,619 Bitcoin previously held as collateral. a Regulatory filing With the US Securities and Exchange Commission (SEC) we read:
On March 24, 2023, MacroStrategy and Silvergate entered into a Prepayment, Assignment, Repayment to Credit and Security Agreement, pursuant to which MacroStrategy will voluntarily pay Silvergate the sum of approximately $161.0 million (the “Repayment Amount”), in full payment, satisfaction, and release from the Loan and all other obligations under the credit agreement.
The document further stated:
Upon Silvergate’s receipt of payment, the credit agreement is terminated, and Silvergate releases its security interest in all of the MacroStrategy assets underwriting the loan, including the Bitcoin that was acting as collateral.
The Silvergate loan was to mature in two years and carry interest equal to the 30-day SOFR plus 3.70%. Three days ago, the floating rate was 8.27%.
MicroStrategy also made more than $300 million in repaying its loans from selling its stock. According to the company, the sales took place between January 1 and March 24 of this year. MicroStrategy’s regulatory filing addressed the stock development, saying that “MicroStrategy has issued and sold a total of 1,348,855 shares under the sales agreement for MicroStrategy’s combined net proceeds (less sales commissions and expenses) of approximately $339.4 million.”
The Virginia-based business intelligence firm revealed that proceeds from the stock sales program funded the loan’s full repayment. In addition, MicroStrategy said it offset the loan using $5 million in a MacroStrategy cash reserve account at Silvergate.
MicroStrategy denies having any assets held with Silvergate
In early March, MicroStrategy denied having any assets held with Silvergate Bank. The company indicated at the time that there was no urgency to repay the loan due to the remote deadline. Based on the 2025 maturity date, MicroStrategy has confirmed that the terms of the loan will remain the same even in the face of potential defaults.
However, MicroStrategy also admitted at the time that it could attract more regulatory scrutiny due to Silvergate’s then-precarious situation.
the next
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When not in the depths of cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.