MicroStrategy to Raise $700M to Buy More Bitcoin

MicroStrategy, the largest corporate holder of bitcoin (BTC), has continued to show its commitment and bullishness towards the flagship cryptocurrency.

MicroStrategy to Raise $700M to Buy More Bitcoin

In a press release shared by Michael Saylor on Wednesday, the software company announced the pricing of its offering of $700 million in convertible senior notes, which will be used to acquire additional bitcoin.

Convertible senior notes are debt securities that buyers can convert into a predefined amount of the issuer’s shares. Under certain conditions, investors can choose to convert their notes into shares of the company’s common stock (equity ownership).

According to MicroStrategy, the notes will have an interest rate of 0.625% and mature in 2030. They will be convertible into cash, shares of MicroStrategy’s common stock, or a combination of both at the company’s discretion.

The company set the initial conversion price at approximately $1,497.68 per share, a 42.5% premium over MicroStrategy’s stock’s last reported closing price.

This offering represents an increase from the previously announced amount of $600 million and comes with an option for the initial purchasers to buy an additional $100 million in notes. 

MicroStrategy expects the offering to close on March 8, 2024.

Bullish on Bitcoin 

The company stated that proceeds from the sale of these debt securities will be used to acquire additional BTC, amongst other things.

“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes,” the company said.

This move highlights MicroStrategy’s continued commitment and optimism towards bitcoin. MicroStrategy is already the largest corporate holder of bitcoin, and this upcoming investment will add to its significant holdings.

MicroStrategy currently holds 193,000 BTC, bought at an average purchase price of approximately $31,544 per coin. With this, MicroStrategy holds nearly 1% of BTC’s circulating supply.