MicroStrategy Sells Billions in Bitcoin to Fund Stock Buybacks

Michael Saylor's strategy for MicroStrategy (NASDAQ: MSTR) has been approved to sell its Bitcoin holdings to fund stock buybacks. The plan involves raising billions of dollars by selling some of its BTC, which currently has a market value of $54.5 billion.

This strategic shift may seem concerning for Bitcoin investors, but it's actually a prudent move. By converting some of its holdings to cash, MicroStrategy can buy back more shares when they become undervalued. The company owns 842,138 Bitcoins, making it the largest corporate investor in BTC with roughly 4% of the cryptocurrency's total supply.

According to the plan, MicroStrategy will sell up to $1.25 billion in Bitcoin to raise U.S. dollar reserves and repurchase up to $1 billion in its preferred stock (NASDAQ: STRC). The company also plans to fund its preferred stock dividends at an 11% yield and buy back another $1 billion in common stock.

This move suggests that MicroStrategy thinks its own stock is more undervalued than Bitcoin, which fell 43% over the past year. However, the company's enterprise value of $40.4 billion is lower than the market value of its Bitcoin holdings.