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- MicroStrategy purchased 129,218 Bitcoin in May 2022.
- The firm sold around 704 Bitcoins for tax purposes.
- The firm again acquired 810 Bitcoins in December 2022.
The firm strategy
MicroStrategy Incorporated is an American organization that provides cloud-based services, business intelligence (BI) and mobile software. The firm’s founder and executive chairman, Michael Saylor described why his firm sold a few Bitcoin (BTC) despite earlier, his Chief Financial Officer, Andrew Kang, stating in May 2022, “At this time, we do not have any intention to sell,” reported by The Wall Street Journal.
According to a Wall Street Journal report of May 2022, MicroStrategy bought a total of 129,218 Bitcoins at the price of $30,700 per BTC for about $3.97 Billion on May 2, 2022. The firm denied the request to disclose the information about buying any more BTC after the report was published.
Saylor had discussed the decision to sell Bitcoin in a Twitter Space. He said that the organization enjoyed tax benefits after selling some of the firm’s Bitcoins.
“Bitcoin is traded as a property right now, so that means that you can sell the property, take the capital loss, and you have the option to buy property in the future or to have bought it in the past, and that’s a different tax basis. We have some capital gains that we pay taxes on, and then we can have some capital losses in Bitcoin, so by selling the Bitcoin and taking the capital loss, we’re able to use that to offset some capital gains. So it’s very tax efficient for the corporation,” Saylor stated.
The firm submitted the United States Securities and Exchange Commission (SEC) filings on December 28 and reported that on December 22, MicroStrategy sold around 704 Bitcoins at an approximate price of $16,776 per BTC. The main motive for selling $11.8 million worth of Bitcoins was tax objectives.
Saylor added, “MicroStrategy plans to carry back the capital losses resulting from this transaction against previous capital gains, to the extent such carrybacks are available under the federal income tax laws currently in effect, which may generate a tax benefit.”
The SEC filing clarified that the firm had bought more Bitcoins than it sold. According to the data, On December 24, MicroStrategy had purchased nearly 810 Bitcoins at approximately $16,845 per Bitcoin, including fees and expenses.
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