Leading software technology firm, MicroStrategy, known for its significant Bitcoin holdings, has completed an $800 million convertible senior notes offering. The notes, carry a 2.25% interest rate and will mature in 2032.
MicroStrategy Doubles Down on Bitcoin
These notes were sold in a private offering to qualified institutional buyers. This move comes on the heels of the company’s earlier announcement of a $700 million offering. This was later upsized due to strong demand.
MicroStrategy Completes $800 Million Offering of Convertible Notes at 2.25% Coupon and 35% Conversion Premium $MSTR https://t.co/qJ6awPbKjO
— Michael Saylor⚡️ (@saylor) June 20, 2024
The company intends to use the net proceeds from the offering, estimated to be around $786 million, to “acquire more Bitcoin and for general corporate purposes.”
MicroStrategy’s aggressive Bitcoin acquisition strategy has seen it amass over 226,331 BTC. Following its recent acquisition, its Bitcoin holdings are now acquired for approximately $8.33 billion. This comes as it also unveiled a new 11,931 BTC. This new sum was acquired for approximately $786 million secured from the offered notes.
The company’s CEO, Michael Saylor, is a vocal Bitcoin advocate. Saylor has repeatedly affirmed his belief in the cryptocurrency’s long-term value. Citing a comment by President Trump, Saylor said “Bitcoin is in the national interest.”
The notes sold in this offering are unsecured and are not registered with the Securities and Exchange Commission (SEC), as they were sold under Rule 144A of the Securities Act of 1933. This rule allows for private sales to qualified institutional buyers without the need for public registration.
Holders of notes may ask MicroStrategy to repurchase their convertible senior notes on June 15, 2029, or under specific circumstances outlined in the offering terms.
Skepticism and Confidence Amidst Share Price Fluctuations
Despite facing some skepticism for its Bitcoin-centric approach, MicroStrategy remains undeterred. Its latest debt offering solidifies its position as a key player in the Bitcoin market. Recently, Bernstein also confirmed the firm as the leader of the Bitcoin Capital Market.
Aside from this, the speed with which the convertible notes were made highlights a growing institutional interest in digital assets. Moreover, it demonstrates MicroStrategy’s ability to leverage its financial standing to continue its Bitcoin accumulation strategy.
This is important seeing as its share price experienced a recent dip, opening at $1,457.93 on Tuesday after previously closing at $1,507.26. MicroStrategy shares later rebounded to $1,473.65 with a trading volume of 78,791 shares. This suggests continued market activity and investor confidence.
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