Michael Saylor's MicroStrategy pays off Silvergate's loan and purchases 6.5K Bitcoin

By: Michael Wilson

March 27, 2023 9:13 PM

For a total of $4.1 billion, or an average of $29,817 per coin, MicroStrategy has acquired 138,955 Bitcoin (BTC).

Business analytics provider MicroStrategy, an early adopter and significant investor in Bitcoin (BTC), is increasing its BTC holdings in light of the current cryptocurrency market recovery.

On March 27th, former CEO and co-founder of MicroStrategy Michael Saylor announced the repayment of the company's $205 million loan to Silvergate through Twitter.

Saylor highlighted that MicroStrategy repaid the Silvergate loan at a 22% discount and used a form 8-K filing with the United States Securities and Exchange Commission to back up his claim.

The corporation also bought a huge hoard of Bitcoin, purchasing 6,455 BTC for $150 million, or at an average price of $23,238 per coin as of March 23, the former CEO stated. As stated in the report, MicroStrategy purchased its current batch of Bitcoin between Feb. 16, 2023 and March 23, 2023.

According to Saylor, MicroStrategy now owns 138,955 BTC after spending $4.1 billion, or an average of $29,817 per coin, on the purchase.

MacroStrategy, a wholly owned subsidiary of MicroStrategy, borrowed $205,000,000 from Silvergate Bank in March 2022 through the Silvergate Exchange Network Leverage program. The loan was due to be repaid on March 23, 2025, and was secured by a number of Bitcoin that MacroStrategy owns.

Loan-to-collateral value ratios cannot be more than 50% under the conditions of MacroStrategy's credit agreement. A prepayment, waiver, and payoff to credit and security agreement was made between MacroStrategy and Silvergate on March 24, 2023, with MacroStrategy voluntarily prepaying Silvergate roughly $161 million.

Silvergate's security interest in all of MacroStrategy's assets collateralizing the loan, including the Bitcoin that was serving as collateral, was released upon Silvergate's receipt of the payback amount, per the filing.

MicroStrategy disclosed to the SEC that it has sold class A common shares valued at $500,000,000 to Cowen & Company and BTIG. MicroStrategy issued and sold 1,348,855 shares under the sales agreement, bringing in approximately $339 million in net proceeds, as per the most recent accounting.

It appears that MicroStrategy's recent purchase of Bitcoin is the first of its kind in 2023. MicroStrategy spent $42.8 million buying 2,395 Bitcoin between November 1 and December 21 of 2023 at an average price of $17,181.