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As bitcoin breaches $100K, MicroStrategy holdings, Saylor’s wealth surge

MicroStrategy, the Tysons-based tech company chaired by bitcoin whale Michael Saylor, has pursued bitcoin as an investment strategy since 2020. Now, it appears to have paid off as bitcoin breached the $100,000 threshold.

Bitcoin rose above $100,000 per coin Wednesday night, after previously breaching $99,000 on Nov. 21. At 11:45 a.m. Thursday, bitcoins were trading for $101,293.94, according to Coinbase, the nation’s largest cryptocurrency exchange, although the cryptocurrency had breached $103,000 earlier in the day.

As of Dec. 1, MicroStrategy and its subsidiaries held approximately 402,100 bitcoins, which were worth $40.37 billion at 11:45 a.m. The company’s 402,100 bitcoins were purchased for approximately $23.4 billion, and at an average purchase price of $58,263 per bitcoin, including fees and expenses.

At 11:45 a.m. Thursday, MicroStrategy shares were trading for $402.78, although shares were trading for $439.60 at market open. The stock’s value has been climbing since September, up from $114.30 on Sept. 6 and reaching a six-month high of $473.83 on Nov. 20, the first time bitcoin came near the $100,000 mark.

Now the world’s largest corporate holder of the cryptocurrency, MicroStrategy announced its first bitcoin purchase in August 2020, making it one of the first public companies to convert its cash treasury reserves into cryptocurrency as a store of value. Since 2020, MicroStrategy has bought bitcoin about 42 times, Saylor said on CNBC’s “Squawk Box” on Tuesday.

Between Nov. 25 and Dec. 1, MicroStrategy bought approximately 15,400 bitcoins for about $1.5 billion in cash, averaging about $95,976 per bitcoin, including fees and expenses.

Saylor, who has made bold pronouncements and statements about bitcoin in the past, in September told CNBC that he thought the cryptocurrency could rise as high as $13 million per bitcoin by 2045, a prediction he repeated Wednesday on Fox Business.

“Digital capital is what happens when your long-term store of value goes from a building, or goes from a portfolio of stocks, to a digital asset like bitcoin. Bitcoin represents the digital transformation of hundreds of trillions of dollars of capital in the world,” Saylor said on Fox Business.

Appearing on CNBC’s “Squawk Box” on Tuesday, Saylor said Microsoft could add up to $4 trillion to its valuation by investing in bitcoin.

As of Sept. 30, Saylor held more than 19.998 million Class A shares of MicroStrategy, 9.9% of the company’s Class A stock. As of 11:45 a.m., his shares were worth a total of $8.05 billion.

He’s also put his own money where his mouth is. In October 2020, Saylor said in a tweet that he held 17,732 bitcoins. In August, Saylor said on Bloomberg Television he owned about $1 billion worth of bitcoin and continued to buy more. On that day, bitcoin was trading around $56,000.

The bitcoin rally began with Donald Trump’s presidential election victory, and on Nov. 11, bitcoin breached $87,000 a coin. At 7 p.m. on Nov. 5, before the election outcome was known, bitcoin was trading for 69,378.53. Although Trump previously called cryptocurrencies a “scam” in 2021, he made pro-bitcoin comments and promises during his campaign, including calls to establish a national strategic bitcoin reserve.

Before bitcoin breached $100,000 on Wednesday, Trump announced he would nominate Paul Atkins, CEO of consultancy Patomak Global Partners, to chair the Securities and Exchange Commission. Atkins was an SEC commissioner from 2002 to 2008 and is a cryptocurrency advocate.

The current SEC chair, Gary Gensler, has announced he will step down on Jan. 20, when Trump is inaugurated. The crypto industry is no fan of Gensler, who has led the SEC to be aggressive in enforcement.

Saylor’s strategy hasn’t always led to fortune. He stepped down as CEO after MicroStrategy’s August 2022 earnings report, when the company disclosed that it had paid a total of $3.977 billion for its bitcoin, which at that time had fallen to a market value of about $2.451 billion. At that point, MicroStrategy also had taken on about $2.4 billion in loans and debt to acquire bitcoin. At points in 2022, the currency fell below $20,000 to prices it had not seen since 2020. Nevertheless, on Thursday, Saylor’s strategy seemed less a part of science fiction and more a result of visionary strategy, though time will tell.

LL Flooring receives $194M acquisition proposal

Las Vegas-based holding company Live Ventures has submitted a proposal to acquire Henrico County-based hard-surface flooring retailer LL Flooring Holdings for approximately $194.4 million in cash.

Live Ventures, which specializes in the retail and flooring industries, published Thursday the letter sent by its president and CEO, Jon Isaac, to the LL Flooring board the previous day. The company is offering $5.85 per outstanding share in cash.

LL Flooring — previously Lumber Liquidators — share prices rose sharply in 2020, from $4.12 at close on April 2 to a peak of $33.70 at close on Dec. 24, 2020. Its share prices have fallen fairly steadily since. On Oct. 6, LL Flooring shares traded for $2.84 at market close.

“We fear that the company’s stock price will continue its decline unless LL Flooring enters into a transaction with a well-capitalized acquiror that has extensive experience working with synergistic retailers in the near term,” Isaac wrote in the letter.

At market close on Oct. 6, the acquisition premium — the difference between the amount paid for the company receiving the offer and its assessed market value — was about 106%.

LL Flooring shares traded for $2.90 at closing on Tuesday and at $2.93 at close on Wednesday.

But on Thursday, the day Live Ventures released the letter, LL Flooring share prices increased more quickly, and at 2:45 p.m. Thursday, LL Flooring shares were trading for $4.12, which dropped the acquisition premium to almost 42% at the time.

LL Flooring has 442 stores spanning 47 states. Earlier this year, Live Ventures acquired California-based floor, carpet and countertop installer Flooring Liquidators. The holding company also owns Georgia-based Marquis Industries, a carpet and hard-surface flooring manufacturer.

“We believe that adding LL Flooring to the Live Ventures portfolio will help the company thrive and be a major catalyst for our buy-build-hold strategy, which has delivered enhanced shareholder value since I joined as [CEO] in 2012,” Isaac wrote.

LL Flooring confirmed Thursday afternoon its receipt of the unsolicited, non-binding proposal. In June, the flooring company rejected F9Brands’ subsidiary Cabinets To Go’s unsolicited proposal to acquire LL Flooring’s outstanding shares for $5.76 per share in cash, saying in a statement that “it significantly undervalued the worth of LL Flooring, its business and prospects.”

In August, the company announced its board had “initiated an exploration of strategic alternatives in response to receipt of multiple inbound expressions of interest regarding a potential transaction with the company” and would consider options including a potential sale, merger or other strategic transaction.

In its statement Thursday, LL Flooring said, “The LL Flooring Board of Directors will carefully review and consider the proposal from Live Ventures in the context of LL Flooring’s strategic alternatives process to determine the course of action that it believes is in the best interests of the company and all of its shareholders, which will include inviting Live Ventures to participate in the ongoing strategic review process on similar terms as others.”

Shareholders do not need to take any action at this time, the company said in the statement. “LL Flooring’s Board and management team believe that with a strong balance sheet and liquidity, the company is well-positioned for the future.”

In 2019, then-Lumber Liquidators agreed to pay a $33 million penalty following a Department of Justice investigation into alleged fraudulent statements about the level of formaldehyde in its laminate flooring from China.

For fiscal 2022, Live Ventures reported $287 million in revenue. LL Flooring reported $1.11 billion in net sales for 2022.

Dominion Energy shareholders receive mini-tender offer

Dominion Energy is urging its shareholders to reject a “mini-tender” offer from TRC Capital Investment, the Richmond-based Fortune 500 utility announced Monday.

Toronto-based investment firm TRC Capital offered to purchase up to 2 million shares of Dominion Energy’s common stock for $44 per share in cash, approximately 4.47% below the closing price of Dominion common stock on Sept. 26, which was the last trading day before the unsolicited offer.

Mini-tenders are offers for less than 5% of a company’s outstanding shares. Because these offers are below the 5% threshold, Securities and Exchange Commission tender offer regulations do not apply.

According to the SEC, “some bidders make mini-tender offers at below-market prices, hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price. Others make mini-tender offers at a premium – betting that the market price will rise before the offer closes and then extending the offer until it does or improperly canceling if it doesn’t.”

This is not TRC Capital’s first mini-tender offer to Dominion. In January 2016, the firm offered to purchase up to 2 million shares at $66.50 per share in cash, approximately 4.19% below the closing price of the trading day before the offer. Dominion also recommended shareholders reject that offer.

TRC Capital’s offer currently closes at 12:01 a.m. EST on Oct. 27, but the company can extend it if it chooses. Shareholders who tendered their shares can withdraw them before the offer expires through written notice.

TRC Capital made a slate of mini-tender offers, including an offer for up to 1 million Moderna common stock shares, in early September, according to TRC news releases. The firm offered $107.56 per share, approximately 4.44% lower than the closing price of common stock in Moderna, the Cambridge, Massachusetts-based maker of a COVID-19 vaccine, on Sept. 1, the last trading day before the offer. On Sept. 29, the firm decreased its offer price to $99 per share.

On Aug. 2, TRC Capital made a mini-tender offer to buy up to 3 million shares of Verizon Communications common stock at $31.95 per share, about 4.4% below the closing price of the stock on Aug. 1.

In May, TRC Capital terminated its offer to buy up to 1 million shares of Canadian fertilizer company Nutrien and returned tendered shares to their holders. Conditions in its offer, made April 5, were not met, according to a news release, including the market price it stipulated shares needed to hit during the offer period.

MicroStrategy buys $347M more bitcoin in Q2

MicroStrategy Inc. and its subsidiaries purchased about $347 million worth of bitcoin — approximately 12,333 units — from April 29 to June 27, according to the Tysons-based tech company’s June 28 filing with the U.S. Securities and Exchange Commission.

Believed to be the world’s largest publicly traded corporate holder of bitcoin, MicroStrategy and its subsidiaries now hold approximately 152,333 bitcoins, purchased for about $4.52 billion total. The average purchase price of each bitcoin was about $29,668, including fees and expenses. As of 11:09 a.m. Monday, bitcoins were selling for $30,934.96 per unit, putting MicroStrategy’s total holdings at a value of about $4.71 billion.

From May 1 to June 27, MicroStrategy raised $333.7 million from the sale of more than 1.07 million shares through its sales agreement with Cowen and Company LLC and Canaccord Genuity LLC. As of 11:13 a.m. Monday, shares were trading for $371.70.

MicroStrategy announced its first bitcoin purchase in August 2020, saying it had converted $250 million from its cash holdings to more than 21,000 bitcoins, making it one of the first public companies to convert its cash treasury reserves into cryptocurrency as a store of value. The strategy is a move that MicroStrategy Executive Chairman Michael Saylor, who stepped down as CEO after the company’s August 2022 earnings report, believes will protect the company’s money from inflation, and one that some traditional finance experts caution against.

Saylor is currently facing a lawsuit from Washington, D.C., alleging he defrauded the city of more than $25 million in income taxes. Although in March a D.C. Superior Court judge dismissed part of the lawsuit that could have netted D.C. up to $150 million, the city can proceed with the part of the lawsuit seeking $25 million.

Atlantic Union transferring stock listing to NYSE

Atlantic Union Bankshares Corp., the Richmond-based holding company for Atlantic Union Bank, announced Friday it is transferring the listing of its common stock and depositary shares from the Nasdaq to the New York Stock Exchange. The bank’s first day of trading on the NYSE is Jan. 18.

“We are excited to join the NYSE alongside many of the world’s most prestigious and well-regarded companies,” said John Asbury, president and CEO of Atlantic Union. “We believe that the NYSE is the right partner for Atlantic Union as we continue to build long-term value for our customers and shareholders.”

The common stock and depositary shares will be under the ticker symbols of “AUB” and “AUBAP,” respectively, and each is a 1/400 interest in a share of its 6.875% perpetual noncumulative preferred stock, Series A.

As of 11 a.m. Friday, Atlantic Union stock was trading at $36.41 per share, a 2.68% increase from the start of trading at 9 a.m. Atlantic Union has 114 branches in Virginia, Maryland and North Carolina, and as of the third quarter in 2022, the bank had $19.95 billion in assets, $16.546 billion in deposits and was the largest bank headquartered in Virginia. Its fourth quarter and full year 2022 earnings report is scheduled Jan. 24.

Ferguson parent company moves primary listing to NYSE

The U.K.-based parent company of Newport News plumbing, HVAC and industrial product distributor Ferguson Enterprises LLC has transferred its primary stock listing from the London Stock Exchange to the New York Stock Exchange, Ferguson PLC announced Thursday.

“We are excited to achieve this key milestone as our listing structure is now fully aligned with our operations and location of our team,” Ferguson Enterprises CEO Kevin Murphy said in a statement.

As of 2:54 p.m. Friday, shares were trading for $121.71 on the NYSE.

Ferguson’s shares remain eligible for the Main Market of the London Stock Exchange as a standard listing segment issuer.

The plan has been in the works a while. On March 8, 2021, Ferguson PLC listed additional ordinary shares on the NYSE as its first step in the transition. On March 10, shareholders passed a special resolution to transfer the company’s listing category on the London exchange from premium to standard.

“With 100% of our operations today in North America, we now have the right listing structure for Ferguson as it continues to grow,” Ferguson PLC Chairman Geoff Drabble said in a statement. “On behalf of the board, I’d like to thank our associates, customers and investors for their support, and we look forward to the significant opportunities ahead.”

Ferguson PLC changed its name from Wolseley PLC in 2017 to reflect its largest subsidiary, Ferguson Enterprises LLC. In January 2021, the parent company sold its United Kingdom-based plumbing and heating distribution business, Wolseley, to private investment firm Clayton, Dubilier & Rice LLC for net cash consideration of approximately $420 million.

Founded in 1953, Ferguson Enterprises has 1,679 branches across the U.S. and Canada and employs 31,000. The company has 34,000 suppliers manufacturing products across North America. Ferguson reported $21 billion in 2021 U.S. revenue and $22.79 billion in its total 2021 revenue.

Genworth launches IPO for mortgage insurance subsidiary

Nearly five months after it was first announced, Henrico County-based Fortune 500 insurer Genworth Financial Inc. on Monday launched an initial public offering for its private mortgage insurance subsidiary, Raleigh, North Carolina-based Enact Holdings Inc.

Genworth Holdings Inc. (GHI), a wholly owned subsidiary of Genworth Financial, is offering 13.31 million shares of common stock in Enact at between $19 to $20 per share. Enact is expected to trade on the Nasdaq Global Select Market under the ticker symbol “ACT.”

GHI expects to grant the underwriters a 30-day option to purchase up to an additional 1.99 million shares of Enact’s common stock at the initial public offering price, less the underwriting discount.

Investment funds managed by Coral Gables, Florida-based Bayview Asset Management LLC have agreed to purchase shares of Enact stock in a concurrent private sale at the IPO price per share, minus the underwriting discount. Bayview has agreed to purchase 14.66 million shares if the IPO price is less than or equal to $22 per share, or 4 million shares if the IPO price is above $22 per share but less than or equal to $24. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are serving as lead book-running managers for the proposed offering.

After initially filing a proposed IPO for the subsidiary with the SEC in April, then delaying the process in May, Genworth amended its SEC filing regarding the Enact IPO on Monday.

In April, Genworth formally terminated its long-delayed $2.7 billion acquisition by China-based Oceanwide Holdings Group Co. Ltd. The company had first mentioned in January the possible IPO of its mortgage insurance business, describing it as a contingency plan if the Oceanwide acquisition fell through.

Genworth reported $178 million in 2020 net income. The company has about 5,000 employees.

FTC fines Capital One CEO for failing to file stock transaction

The Federal Trade Commission fined McLean-based Capital One Financial Corp. CEO Richard Fairbank a $637,950 civil penalty for violating antitrust laws in finalizing stock acquisitions, the FTC announced Thursday. The settlement must be approved by the U.S. District Court for the District of Columbia.

The FTC alleged that Fairbank violated the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 in his acquisition of Capital One stock. In 2018, Fairbank’s compensation package included more than 100,000 Capital One shares, which increased his holdings to $168 million. The complaint alleged that Fairbank failed to report the award to federal antitrust authorities and illegally finalized it before agencies could investigate.

The HSR Act requires companies and individuals to report transactions over a certain threshold to the FTC and the Department of Justice. Thresholds are determined by the size of the transaction and the size of the person involved. In 2021, the size of the transaction threshold is $92 million.

The FTC and the Department of Justice have 30 days after a transaction is reported to conduct an initial investigation and file a second request for additional information. The maximum civil penalty for an HSR violation is currently $43,792 per day.

The FTC alleges that Fairbank failed to file prior to acquiring Capital One voting securities in 1999 and 2004. He made a corrective filing in 2008.

Fairbank violated the HSR Act in 2018 from March 8, 2018, until Jan. 17, 2020, after he had made a corrective filing and observed the 30-day waiting period, according to the FTC.

The FTC settlement was referred to the Department of Justice, which filed the complaint in the U.S. District Court for the District of Columbia on Sept. 2.

The proposed settlement will be published in the Federal Register and will have a 60-day comment period before the U.S. District Court rules. Anyone can send written concerns to U.S. special attorney Maribeth Petrizzi.

Leonardo DRS files IPO registration

The Italian federal defense contractor Leonardo announced Friday it has filed a registration statement with the Securities and Exchange Commission for an planned initial public offering (IPO) of its U.S. subsidiary, Arlington-based Leonardo DRS.

The $2.54 billion IPO could take place in March, according to reports from Reuters. Leonardo did not release the official amount of the IPO.

“By retaining our majority shareholding we intend to maintain a significant exposure in this strategically important market, whilst continuing to leverage established relationships for all of Leonardo’s businesses,” Leonardo CEO Alessandro Profumo said in a statement.

The company intends to list a minority stake of Leonardo DRS on the New York Stock Exchange using the ticker symbol DRS, Profumo added.

After the completion of the offering, Leonardo US will remain the majority shareholder of Leonardo DRS. It’s anticipated the company will enter a proxy agreement with the U.S. Department of Defense to allow Leonardo DRS to continue to compete and perform on classified programs.

Leonardo released a Feb. 19 statement saying it was considering the IPO.

Leonardo DRS is the largest U.S. subsidiary of the Italian defense/aerospace conglomerate and is a military defense tech contractor with $2 billion in annual revenue. The company works with customers including the U.S. Army, Navy and intelligence community. In 2020, the company won a $120 million U.S. Navy contract to provide engineering design and software testing for aircraft protection systems.

Goldman Sachs & Co. LLC, BofA Securities Inc. and J.P. Morgan will serve as lead book-running managers and Barclays, Citigroup, Credit Suisse and Morgan Stanley will act as book-running managers for the proposed offering. Mediobanca is serving as financial adviser to Leonardo.

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New Hampton Roads bank raises $20M

Integrity Bank for Business, a new bank forming in Virginia Beach, has received signed subscription agreements for stock purchases totaling $20.285 million, it announced Tuesday.

Former Heritage Bank President and CEO Mike Ives plans to open Virginia Beach-based Integrity Bank for Business in April 2021.

By Jan. 15, Integrity had received subscription agreements of $19.935 million by the closing date of the first phase of its stock offering; additional agreements of $350,000 were pending on that date, but not delivered until later. Integrity’s stock offering is for a minimum of $20 million and a maximum of $23 million.

With the first phase of the stock offering now complete, Integrity is moving into the second phase, which may have a broader scope. It plans to close the offering for new subscription agreements when it has either raised $23 million or on Feb. 19, 2021, whichever comes first.

Helmed by former Heritage Bank President and CEO Mike Ives, Integrity features many Heritage alumni. Heritage was the last new Hampton Roads-headquartered bank, and focused on business customers before it merged with Southern Bank in 2016. Integrity is headquartered in Virginia Beach’s Lynnhaven area, where the bank will also locate its initial branch office. It plans to open for business in April 2021.

“We are very excited about the reception that we are receiving in our community for our offering. We have already reached our minimum offering amount and have pending more expressions of interest for additional subscription agreements,” Ives said in a statement. “Integrity has filed its applications with the Virginia Bureau of Financial Institutions for a Virginia bank charter, the Federal Deposit Insurance Corporation for deposit insurance, and for the Federal Reserve Bank of Richmond for membership in the Federal Reserve System. So far, we have not been notified of any material issues with any of our applications other than the usual requirements for completion of the application processes and for approval.

“Assuming that Integrity completes its stock offering and receives approval of its regulatory applications, Integrity projects that it will open in the second quarter of 2021.”