MicroStrategy Inc. (NASDAQ:MSTR) has further increased its holdings by purchasing 5,262 Bitcoin (CRYPTO: BTC) at an average price of $106,662, totaling approximately $561 million.
What Happened: This acquisition brings MicroStrategy's total Bitcoin holdings to 444,262 BTC, with an average cost of $62,257 and a total cost of approximately $27.7 billion as of Dec. 22, 2024.
This latest purchase by MicroStrategy comes at a time of market speculation about a potential pause in their Bitcoin-buying strategy next month.
This speculation centers around the idea that the company might temporarily halt its practice of issuing convertible debt or selling shares through "at-the-market" programs to fund these acquisitions.
It is believed that these activities might be put on hold as the company prepares for the release of its earnings report in early February 2025.
A venture capitalist initially raised concerns about a potential restriction on the company issuing new convertible debt in January, which has spurred a great amount of discussion among investors.
While MicroStrategy has not confirmed or denied these rumors, it is generally understood that companies often implement self-imposed blackout periods to ensure compliance with trading regulations.
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These periods usually occur near the end of a fiscal quarter and before the public release of earnings, thus limiting access to non-public information for insider trading purposes.
The SEC does not require these blackout periods, but companies implement them to maintain trust and integrity with the shareholders.
These financial blackout periods may apply to either ATM share sales, convertible debt offerings, or both and that information is not currently clear.
These potential restrictions on Bitcoin purchases have put a spotlight on MicroStrategy's funding strategies.
Some analysts believe the timing of the rumored blackout aligns with MicroStrategy's upcoming earnings report between Feb. 3-5, 2025, and could be a result of common precautions that businesses adopt before publicly releasing financial information.
Furthermore, the company's inclusion in the NASDAQ 100 index on Dec. 23 could also play a part, as this often leads companies to reassess their practices around governance and public disclosures.
Any decision about a blackout period is ultimately decided by MicroStrategy's board of directors, reflecting the importance of regulatory adherence.
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