Group One Acquires 13.5% Options Position in MicroStrategy

Group One – a proprietary trading firm – has purchased options to buy 1.3 million shares of MicroStrategy (MSTR) worth $240 million, per a recent Securities and Exchange Commission (SEC) filing. 

• As reported by Bloomberg on Tuesday, the purchase would account for a 13.5% stake in MicroStrategy, whose executive chairman is the Bitcoin booster, Michael Saylor. 
• Group One is a market maker and liquidity provider for U.S. equity options and other securities. 
• MicroStrategy is an enterprise software company famous for being one of the world’s single largest holders of BTC. The company owns over 131,000 coins, while Saylor personally owns another 17,000. 
• Given its massive exposure to the asset, MSTR has become a proxy for U.S. investors seeking exposure to Bitcoin. The United States currently lacks a Bitcoin spot ETF, meaning formal avenues for gaining direct exposure are limited for U.S. investors. 
• As such, MSTR was also a victim to Bitcoin’s tumultuous 2022, declining 74% across the year.
• MicroStrategy suffered a $1 billion impairment loss on its Bitcoin in Q2 2022. Michael Saylor relinquished his position as CEO around this time, but the company remained committed to its Bitcoin strategy. 
• The firm conducted its first-ever Bitcoin sale late last year for 704 BTC, but only to generate a tax benefit by purchasing those coins back only days later. Nevertheless, this technically constitutes a broken promise from Michael Saylor that MicroStrategy would never sell its coins.