MicroStrategy Seeks Another $400 Million to Go Bitcoin Shopping

Despite the recent high volatility of Bitcoin (BTC), MicroStrategy is still poised to sourcing funds to increase its Bitcoin holdings.

According to a blog post, today by the publicly traded business intelligence company, an aggregate of $400 million convertible senior notes will be issued to private investors, as part of efforts to purchase more bitcoins.

“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoins,” the company stated.

The senior notes, which are due 2028, will be issued to qualified private investors in accordance with Rule 144A under the United States Securities Act of 1933.

MicroStrategy intends to offer the notes mainly to investors outside the United States pursuant to Regulation S of the Securities Act, the announcement added. Unlike other related news of this sort, MicroStrategy did not disclose notable details of the offering, such as the interest rate, conversion ratio, maturity date, among other things.

Despite not adding these details to the announcement, the firm made it clear that it plans to use the proceeds generated from the sale of the notes to buy Bitcoin. Notably, the notes will be secured on a senior secured basis with its existing and future senior indebtedness.

Investors will have a stake in profits that come from any business, including the purchase of additional bitcoin, that the company may conduct within or after the sale of the notes.

However, the new MicroStrategy senior notes investors will be excluded from partaking in profits generated from existing businesses of the company.

Another development, of which the significance is yet to be known, is that the company is transferring its “approximately 92,079 bitcoins to a newly formed subsidiary, MacroStrategy LLC,” according to the announcement today.

MicroStrategy Bitcoin Purchase Spree

There is no denying that MicroStrategy is the pioneer U.S. company that helped lured several others, including Tesla, to join the bitcoin bandwagon.

Since the company announced its initial bitcoin acquisition in August 2020, it has gone on an acquisition spree for the asset, increasing its holding to a groundbreaking 92,079 BTC, with the company just a few thousand away from reaching 100,000 BTC.

Part of its motivation for making it want to acquire more of the largest cryptocurrency is the rapid decline in the value of the US dollar.