MicroStrategy Raises the Ante: $700 Million Allocated to Bitcoin
MicroStrategy, a business intelligence company, has recently announced its intention to conduct a private sale of convertible senior notes worth $600 million in order to purchase more Bitcoin and cover its corporate expenses. However, the company has now decided to increase its convertible debt offering by an additional $100 million.
The firm currently holds 193,000 bitcoins and its executive chairman, Michael Saylor, strongly believes in the potential of Bitcoin, considering it to be the most popular investment asset.
MicroStrategy has clarified that the interest rate, conversion rate, conversion price, and other terms of the notes will be determined at the time of pricing the offering. Furthermore, the notes will be offered and sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act.
MicroStrategy’s decision to increase its investment in Bitcoin showcases its bold expansion in the cryptocurrency. Earlier this year, the company had announced a plan to raise $600 million through convertible senior notes to acquire more Bitcoins. The increase to $700 million demonstrates Saylor’s unwavering confidence in the growth prospects of Bitcoin.
The initial interest rate on the notes will be 0.625% per annum, payable semi-annually. Initial purchasers will have the option to purchase an additional $100 million worth of notes within a 13-day window following the issuance.
The rights and options provided to holders of the notes aim to offer flexibility and potential benefits for investors. Holders will have the option to repurchase on demand, on September 15, 2028, or upon specified fundamental changes. The conversion options include cash, shares of MicroStrategy’s class A common stock, or a combination of both.
The decision to expand the plan comes after a volatile trading session that resulted in a 15% decrease in MicroStrategy’s share price. This change in plans demonstrates the company’s interest and proactive response to market sentiments, as well as its desire to optimize its crypto holdings by issuing these notes.
In a previous interview with Bloomberg, MicroStrategy CEO Michael Saylor stated that he would never sell his Bitcoin holdings and compared Bitcoin to real estate and gold, emphasizing its superiority. The influx of investments in Bitcoin from US spot ETFs has led to a surge in prices, and MicroStrategy considers itself to be a “Bitcoin development company.”