Michael Saylor, the chairman of MicroStrategy, may be having second thoughts about his approach to purchasing Bitcoin now that BTC exchange-traded funds (ETFs) are almost here.
Saylor started buying Bitcoin in 2020, claiming that the anticipated threat of inflation required the corporation to reduce its cash holdings. When software sales stagnated, a change in direction took place.
Saylor stated he will focus on the Bitcoin aspect of the business’s dual strategy before stepping down as CEO earlier this year.
The U.S. Securities and Exchange Commission (SEC) looks ready to approve exchange-traded funds (ETFs) that invest directly in Bitcoin, after a significant court decision earlier this year. This has investors and experts wondering if MicroStrategy’s shares will continue to command a premium.
As per Bloomberg, the matter was slightly raised by MicroStrategy’s latest filing.
Saylor has accumulated more than $5.5 billion in Bitcoin since the middle of 2020. As the price of Bitcoin rose at that period, MicroStrategy’s shares surged by more than thrice.
Estimates indicate that because of MicroStrategy’s September holdings of 158,245 Bitcoin, the company’s shares are trading at a 30% premium to its enterprise value.
Based on an analysis cited by Bloomberg, the premium for MicroStrategy shares might decrease to a range of 15% to 25% if the SEC approves the ETFs in the upcoming months.
Although the launch of ETFs could cause a spike in the price of Bitcoin, one analyst thinks this will increase the price of MSTR shares, offsetting a decrease in the premium.
MicroStrategy paid around $150 million for 5,445 bitcoins between August 1 and September 24. In order to finance the acquisition, the business issued and sold 403,362 MSTR shares in total.
