MicroStrategy CEO Saylor Hints at Return to Bitcoin Purchases

Michael Saylor, CEO of MicroStrategy, sent out a cryptic two-word message on social media that sparked speculation about his company's plans to resume buying Bitcoin. The post, which simply read 'We're back', followed a 10-week period in which the company did not purchase any BTC.

The freeze in Bitcoin purchases was attributed to three key financial factors. Firstly, MicroStrategy had been struggling with debt, holding around $6.71 billion in convertible notes against its $6.69 billion cash reserves. This left the company with net leverage of just 0.1%. However, over the past week, this gap has closed, and MSTR stock rallied by 12%.

MicroStrategy has also been using a significant portion of its fresh capital to fund dividend payments on its preferred shares, STRC. In July, the company raised $2.47 billion in cash through the sale of these shares at $90 each, paying an 9% interest rate. Today, around $10 billion of these shares trade at a 12% dividend rate.

While Saylor's post hinted at a return to Bitcoin purchases, it remains unclear whether this will actually happen. With BTC trading near $79,183 and MicroStrategy having paid an average price of $75,388 per coin in previous transactions, their treasury is barely above water. The company has also been selling coins to fund its dividend payments, which could suggest that they are not ready to resume buying yet.