MicroStrategy could raise up to $500 million to buy bitcoin

MicroStrategy could sell up to $500 million in class A common stock and could buy more bitcoin.

A new prospectus filed with the Securities and Exchange Commission (SEC) says the firm has entered into an agreement with agents Cowen and Company and BTIG to sell up to $500 million in stock with a possible eye towards acquiring more bitcoin.

"We intend to use the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin, unless otherwise indicated in the applicable prospectus supplement," the filing said. "We have not determined the amount of net proceeds to be used specifically for any particular purpose."

MicroStrategy began adding swaths of bitcoin to its balance sheet under former CEO and bitcoin bull Michael Saylor. The billionaire stepped down from the company last month, but continues to chair the investment committee. Incoming CEO Phong Le said the firm still plans to hold bitcoin for the long term. The comments came as MicroStrategy revealed impairment charges of more than $900 million due to the wider crypto market fallout and plunging price of bitcoin.

"We have not set any specific target for the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin," said the business strategy portion of the filing.

Bitcoin was trading up 10%, above $21,000, at the time of publication.

Separately, Saylor is facing a suit from the Washington, D.C. attorney general over alleged tax fraud. MicroStrategy is also named in the suit for allegedly aiding Saylor.