MicroStrategy Withdraws Its Plans to Sell Shares
MicroStrategy Inc., whose stock was battered earlier this week on news it was revising downward its results for the past two years, on Wednesday withdrew its application to sell 6.5 million shares to the public.
The software company’s announcement sent its shares up $16.42, or nearly 22%, to close at $88.73 in heavy trading on Nasdaq. The shares had plunged 62% on Monday and fell an additional 16.6% on Tuesday on news of the earnings restatement. Just two weeks ago the shares hit an all-time high of $333.
The company filed with the Securities and Exchange Commission on Feb. 24 to sell 4 million shares of Class A common stock while some of its stockholders, including MicroStrategy Chairman and Chief Executive Michael Saylor, planned to sell 2.5 million shares.
The shares planned for sale were worth about $630 million at that time, when MicroStrategy shares were trading at around $157.
“MicroStrategy no longer intends to sell the common stock registered,” according to a filing Wednesday with the Securities and Exchange Commission.
A spokesman for the Vienna, Va.-based company, which makes software that enables corporations to use online data to plan marketing strategies, did not return a call seeking comment. MicroStrategy had planned to use the proceeds from the sale of its shares for working capital, capital spending, possible acquisitions and general corporate purposes.
It had planned to spend $100 million over the next year to develop, market and operate Strategy.com, its personal intelligence network which leverages the firm’s software platform to deliver personalized, required information to consumers.
Initially, the company said it was revising the statements because of new accounting guidelines issued by the SEC. However, MicroStrategy said late Tuesday that the revisions were being made to conform with existing accounting principles.
Several purported class-action lawsuits have been filed against MicroStrategy and some of its executives and directors, alleging violations of securities laws in connection with the revision of the 1999 and 1998 results.
