Capital Group Buys 12.2% Stake in Bitcoin-Proxy MicroStrategy
MicroStrategy is heavily invested in bitcoin and has bought over 105,000 bitcoins for approximately $2.741 billion, as of late June.
key takeaways
- The global investment management company, Capital Group, ranks among one of the oldest and largest investment management firms in the world
- MicroStrategy has recently emerged as one of the most crypto-bullish public companies in the world, under the leadership of CEO Michael Saylor who previously said bitcoin was the only investment he believes in
Capital International Investors (CII), a division of the Los Angeles-based Capital Group, purchased 953,242 shares or a 12.2% stake in MicroStrategy, a business intelligence and analytics platform, according to a filing with the US Securities and Exchange Commission.
Although the SEC filing was submitted on June 30, CII Senior Vice President and Senior Counsel Walter Burkley signed off on the securities purchase on Monday, July 12, the document shows.
A Capital Group spokesperson declined to comment on the “individual holdings,” citing company policy, when Blockworks reached out for additional information. MicroStrategy was not available for immediate comment on July 13.
The global investment management company, Capital Group, ranks among one of the oldest and largest investment management firms in the world with over $7.6 billion in revenue. As of December 31, 2020, the firm said it manages more than $2.3 trillion in equity and fixed income assets for millions of individuals and institutional investors around the world.
The investment gives CII an indirect line into the cryptocurrency market, as MicroStrategy is heavily invested in bitcoin and has bought over 105,000 bitcoins for approximately $2.741 billion, as of late June.
Prior to the purchase in early June, MicroStrategy announced that it would offer $500 million of senior secured notes with an annual interest rate of 6.125% in a private offering to qualified institutional buyers to finance the purchasing of more bitcoin, Blockworks previously reported. It marked the first time junk bonds were used to fund a cryptocurrency acquisition.
MicroStrategy has recently emerged as one of the most crypto-bullish public companies in the world, under the leadership of CEO Michael Saylor who previously said bitcoin was the only investment he believes in. During the Bitcoin 2021 conference in Miami, Saylor said while on a panel, “I guess I lost faith in all of my traditional investments,” referring to what made him eventually decide to venture into crypto, Blockworks reported.
In March, Saylor also warned about the toxicity of cash and traditional assets during a Blockworks webinar. He said that “bitcoin and digital assets became the solution to monetary inflation” and added, “there’s an awareness that isn’t going away.”
MicroStrategy’s stock on NASDAQ was up less than 1%, or $1.61, to $590.30 as of 2:40 pm ET on July 13.
