MicroStrategy repays Silvergate loan and buys more BTC

With the purchase, MicroStrategy’s total Bitcoins holdings have grown to 138,955 BTC, purchased for $4.1bln at an average of $29,817 per coin

MicroStrategy, a business intelligence company and major Bitcoin investor, is buying more bitcoin (BTC) amid the recent recovery in the crypto currency market.

MicroStrategy co-founder and former Chief Executive Officer Michael Saylor took to Twitter on March 27 to announce the repayment of $205mln loan to Silvergate.

Citing a form 8-K filing with the US Securities and Exchange Commission, Saylor emphasised that MicroStrategy paid back the Silvergate loan at a 22 per cent discount.

The firm also purchased a considerable stash of Bitcoin, buying 6,455 BTC for $150mln, or at an average cost of $23,238 per coin as of March 23, the ex-CEO said. As per the filing, MicroStrategy purchased its latest batch of Bitcoin between February 16, 2023 and March 23, 2023.

With the purchase, MicroStrategy’s total Bitcoins holdings have grown to 138,955 BTC, purchased for $4.1bln at an average of $29,817 per coin, according to Saylor.

As announced earlier, MicroStrategy’s subsidiary MacroStrategy received a $205mln term loan from Silvergate Bank under its Silvergate Exchange Network Leverage program in March this year. The loan was collateralized by certain Bitcoin possessed by MacroStrategy and had a scheduled maturity date of March 23, 2025.

Under the credit agreement terms, MacroStrategy was required to maintain a loan to collateral value ratio of below 50 per cent. On March 24, 2023, MacroStrategy and Silvergate entered into a prepayment, waiver and payoff to credit and security agreement, with MacroStrategy willingly prepaying Silvergate nearly $161mln in full repayment.

The credit agreement was terminated upon Silvergate’s receipt of the payoff sum, and Silvergate released its security interest in all of MacroStrategy’s assets collateralizing the loan, including the Bitcoin that was serving as collateral, the filing states.

In the filing, MicroStrategy also stated that the firm entered into an agreement with two firms — Cowen and Company and BTIG — to sell its aggregated class A common stock worth $500,000,000. As per the latest updates, MicroStrategy issued and sold 1,348,855 shares under the sales agreement for aggregate net proceeds to MicroStrategy of around $339mln.

The current Bitcoin purchase by MicroStrategy is seemingly the first such transaction so far this year. The previous purchase occurred in late December 2021, with MicroStrategy purchasing 2,395 BTC at an average price of $17,181 for a total of $42.8mln between November 1 and December 21.