MicroStrategy’s Michael Saylor’s Bold Move: Offering to Buy Out Shareholders Before Acquiring Bitcoin

MicroStrategy's CEO, Michael Saylor, faced challenges before successfully adding Bitcoin to the company's balance sheet in 2020. At the 2024 Abundance360 Summit, Saylor shared insights into how he navigated obstacles by offering to buy out MicroStrategy shareholders in a Dutch action as they embarked on acquiring $250 million worth of Bitcoin.

Saylor's Strategic Offer to Shareholders

During the conference, Saylor disclosed that he provided MicroStrategy shareholders with the opportunity to tender their shares back to the company while they were in the process of purchasing Bitcoin. He implemented a Dutch auction to repurchase $250 million worth of stock at a premium price of $140 per share, exceeding the existing stock price of $121-$122. Shareholders were given a 20-day window to consider this offer.

Philosophy of Accumulating Bitcoin

Saylor emphasized his commitment to "buy Bitcoin" and expressed his willingness to take any necessary actions to increase the company's Bitcoin holdings. At the time of the offer, the price of Bitcoin stood at around $11,000, a significant drop from its peak of $20,000 in 2017.

MicroStrategy's Bitcoin Holdings and Strategy

Through Saylor's aggressive approach to acquiring Bitcoin, MicroStrategy has emerged as one of the largest corporate holders of the digital asset. The company's current Bitcoin holdings amount to over 214,246 BTC, valued at approximately $13.7 billion, solidifying Bitcoin as its primary corporate treasury asset.

MicroStrategy has financed its Bitcoin purchases through debt offerings and equity issuances, showcasing Saylor's unwavering commitment to accumulating Bitcoin, even amidst market fluctuations. Saylor has reiterated that there are no plans to divest the company's Bitcoin holdings in the foreseeable future.

Frequently Asked Questions

What Is a Precious Metal IRA?

A precious metal IRA allows for you to diversify your retirement savings in gold, silver, palladium and iridium. These are called “precious” metals because they're very hard to find and very valuable. They are great investments for your money, and they can protect you from inflation or economic instability.

Bullion is often used for precious metals. Bullion refers actually to the metal.

Bullion can be purchased via a variety of channels including online sellers, large coin dealers, and grocery stores.

With a precious metal IRA, you invest in bullion directly rather than purchasing shares of stock. This will ensure that you receive annual dividends.

Precious metal IRAs have no paperwork or annual fees. Instead, your gains are subject to a small tax. Plus, you get free access to your funds whenever you want.

How to open a Precious Metal IRA

The first step in opening an Individual Retirement Account, (IRA), is to decide if it's something you want. Open the account by filling out Form 8606. Next, fill out Form 5204. This will determine the type of IRA that you are eligible for. This form must be submitted within 60 days of the account opening. You can then start investing once you have this completed. You can also contribute directly to your paycheck via payroll deduction.

For a Roth IRA you will need to complete Form 8903. Otherwise, the process will look identical to an existing IRA.

To be eligible to have a precious metals IRA you must meet certain criteria. The IRS stipulates that you must have earned income and be at least 18-years old. You cannot earn more than $110,000 annually ($220,000 if married filing jointly) in any one tax year. Additionally, you must make regular contributions. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.

A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. But, you'll only be able to purchase physical bullion. You won't have the ability to trade stocks or bonds.

Your precious metals IRA can be used to directly invest in precious metals-related companies. This option can be provided by some IRA companies.

There are two major drawbacks to investing via an IRA in precious metals. They aren't as liquid as bonds or stocks. This makes them harder to sell when needed. Second, they don't generate dividends like stocks and bonds. You'll lose your money over time, rather than making it.

How much gold do you need in your portfolio?

The amount that you want to invest will dictate how much money it takes. A small investment of $5k-10k would be a great option if you are looking to start small. As your business grows, you might consider renting out office space or desks. So you don't have all the hassle of paying rent. You only pay one month.

Consider what type of business your company will be running. In my case, I am running a website creation company, so we charge clients around $1000-2000/month depending on what they order. Consider how much you expect to make from each client, if you decide to do this kinda thing.

You won't get a monthly paycheck if you work freelance. This is because freelancers are paid. You may get paid just once every 6 months.

You need to determine what kind or income you want before you decide how much of it you will need.

I recommend starting with $1k-$2k in gold and working my way up.

Statistics

• The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
• Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
• If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
• You can only purchase gold bars at least 99.5% purity. (forbes.com)
• Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)

External Links

cftc.gov

• Fraud Advisory: Precious Metals Fraud | CFTC
  

irs.gov

• Retirement Topics – IRA Contribution Limits
  

forbes.com

• Gold IRA, Add Sparkle to Your Retirement Nest egg
  
• Understanding China's Evergrande Crisis – Forbes Advisor
  

bbb.org

• BBB: Start with trust(r)
  

How To

Guidelines for Gold Roth IRA

You should start investing early to ensure you have enough money for retirement. You should start as soon as you are eligible (usually at age 50) and continue saving throughout your career. You must contribute enough each year to ensure that you have adequate growth.

You can also take advantage of tax-free savings opportunities like a traditional 401k (k), SEP IRA (or SIMPLE IRA). These savings vehicles enable you to make contributions while not paying any taxes on the earnings, until they are withdrawn. These savings vehicles can be a great option for individuals who don't qualify for employer matching funds.

Savings should be done consistently and regularly over time. You may not be eligible for any tax benefits if your contribution is less than the maximum allowed.

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By: Vivek Sen
Title: MicroStrategy's Michael Saylor's Bold Move: Offering to Buy Out Shareholders Before Acquiring Bitcoin
Sourced From: bitcoinmagazine.com/business/microstrategys-saylor-buy-out-mstr-shareholders-buying-bitcoin
Published Date: Wed, 20 Mar 2024 14:06:51 GMT