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On March 13, the business intelligence company based in Virginia, Microstrategy, unveiled plans to generate $500 million by issuing convertible notes due in 2031. Echoing their previous fundraising efforts, the newly acquired funds are earmarked for bitcoin acquisitions along with covering various general corporate expenditures.
Microstrategy Continues Bitcoin Bet, Plans $500M Convertible Bond Sale
Microstrategy (Nasdaq: MSTR) is set to expand its bitcoin (BTC) holdings following its successful $800 million convertible note offering, which facilitated the purchase of an additional 12,000 BTC. On Wednesday, the company announced its intention to launch a new convertible bond offering amounting to $500 million. These convertible senior notes, due for maturity in 2031, come with an option for Microstrategy to issue an extra $75 million in aggregate principal amount of the notes.
MicroStrategy Announces Proposed Private Offering of $500 Million of Convertible Senior Notes $MSTR https://t.co/nRxijBHsgX
— Michael Saylor⚡️ (@saylor) March 13, 2024
In a repeat of its previous strategy, Microstrategy aims to utilize the newly secured $500 million primarily for BTC acquisition. The company’s announcement states, “Microstrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoin and for general corporate purposes.” The prior sale enabled Microstrategy to bolster its BTC inventory by 12,000, reaching a total of 205,000 bitcoins. Given the current market rates, the $500 million investment could potentially add approximately 6,835 BTC to Microstrategy’s portfolio.
Microstrategy’s latest move, follows Coinbase’s recent initiative to generate $1 billion through convertible bonds. Both companies have witnessed a notable increase in their share prices. On Wednesday, Microstrategy’s stock climbed by 10.85%, and it has seen an increase of over 37% in the last five days. Looking at the broader picture, MSTR has risen by 409% against the U.S. dollar over the past six months and 638% over the last year.
What do you think about Microstrategy’s convertible bond sales? Share your thoughts and opinions about this subject in the comments section below.