MicroStrategy Upsizes Convertible Note Offering to $700M to Fund Bitcoin Purchases


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MicroStrategy, the company known for owning the most Bitcoins, confirmed an increase in its convertible note offering by 40%, bringing the total to a whopping $700 million.

The notes will provide a 2.25% annual yield and are focused on institutional investors via a private offering. It is important to note that MicroStrategy has fallen in love with Bitcoin over the years and witnessed huge profits on its holdings.

MicroStrategy Doubles Down on Bitcoin

The Tysons Corner, Virginia-based company revealed in a press release on Friday that these notes would be unsecured senior obligations, maturing in June 2032. Additionally, MicroStrategy has granted initial buyers the option to purchase an extra $100 million in notes within 13 days of the initial issuance.

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Michael Saylor’s company anticipates closing the offering on Monday as a new week begins. The money from the offering will be used to acquire more Bitcoin and for general corporate purposes.

Market Reaction

The price of MicroStrategy shares went up 2% in early Friday trading, reaching just above $1,500. However, the shares fell 7.5% a day prior mainly to a Bitcoin crashing. The price of crypto stocks and Bitcoin go hand-in-hand.

Moreover, brokerage firm Bernstein assigned an outperform rating for MicroStrategy, setting a price target of $2,890, in its report. The positive prediction from Bernstein displays confidence in the company’s financials.

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The MicroStrategy Bitcoin Accumulation

MicroStrategy has not been shy of buying Bitcoin. It began doing so in 2020, marking a strategic shift in its treasury management. Since then, it has taken 214,400 BTC under its balance sheet, valued at approximately $14 billion.

MicroStrategy, the largest publicly listed holder of Bitcoin, has aggressively bought BTC and Executive Chairman Michael Saylor has been a vocal supporter of the cryptocurrency, consistently asking investors to buy the dips. As per the entrepreneur, Bitcoin is undervalued.

Strategic Implications

The decision to expand the convertible note offering underscores MicroStrategy’s unwavering belief in Bitcoin’s potential as a store of value. By leveraging convertible notes, the company can secure additional capital at a relatively low-interest rate, enabling further investment in Bitcoin without immediate dilution of equity. This strategic move not only strengthens MicroStrategy’s balance sheet but also aligns with its long-term vision of integrating Bitcoin into its corporate strategy.

MicroStrategy’s actions come at a time when institutional interest in Bitcoin and other cryptocurrencies continues to grow. The firm’s substantial Bitcoin holdings and public commitment to acquiring more digital assets signal confidence in the cryptocurrency market’s future. This move may also influence other corporations to consider similar strategies, further legitimizing Bitcoin as a corporate treasury asset.

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