MicroStrategy’s Strategic Move: $604M Notes Sold To Bolster Bitcoin Holdings

MicroStrategy, a prominent player in Bitcoin investment, has concluded another round of convertible notes offering to bolster its Bitcoin reserves.

In an announcement by former MicroStrategy CEO Michael Saylor on Mar 18, the company disclosed the completion of its planned issuance of 0.875% convertible senior notes maturing in 2031.

The notes we sold in the offering totalled $603.75 million. This included $78.75 million worth of notes issued through an option to purchase.

As per the announcement, they sold the notes privately to big-money folks who can buy lots of them legally in the United States.

A few days after MicroStrategy finished raising $800 million through a convertible note on March 8, they’re at it again with another move. This time, they’re using the money to buy 12,000 more Bitcoins for their treasury reserve.

Like before, MicroStrategy will use the money it gets from selling the convertible notes to buy more Bitcoin, as mentioned in the announcement.

Just minutes after saying they would get $604 million more money, Saylor said they would also buy more than 9,245 BTC using some of that new money and extra cash they got.

The old boss said we paid about $67,382 for each BTC we got. We got a total of 214,246 BTC, which is about 1.02% of all the Bitcoin that’s going to be made. We got them for around $35,160 each, the whole bunch.

Bitcoin-Backed MicroStrategy Fundraising

MicroStrategy made an announcement about its second round of fundraising on Mar 13, aiming to gather $600 million from a private offering of senior convertible notes.

Senior convertible notes are like IOUs. You can switch to company shares later. MicroStrategy’s notes mature on Mar 15, 2031, unless they’re bought back, paid off, or changed into shares before that.

Named ‘senior’ for priority during bankruptcy or liquidation, holders of these notes receive payment before common shareholders if the company fails.

Saylor has become one of the major supporters of Bitcoin, committed to holding onto it for the long haul. Just last month, the former CEO of MicroStrategy stated firmly that he has no intention of selling any Bitcoin.

“I’m sticking with buying even if it’s expensive. Bitcoin is our way out,” Saylor declared when asked if his company was considering selling any of its Bitcoin, which amounted to 190,000 BTC back then.

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