Originally published on: September 20, 2024
MicroStrategy has successfully concluded a noteworthy transaction by issuing 0.625% convertible senior notes due in 2028, raising an impressive $1.01 billion. This strategic move aims to fuel the company’s Bitcoin acquisition efforts and further expand their digital asset holdings.
Acquiring Funds for Bitcoin Investment
In a private offering targeted at institutional investors, MicroStrategy finalized the issuance on Sept. 19, enabling investors to convert their holdings into either cash or MicroStrategy stock. The company plans to allocate a portion of these raised funds towards Bitcoin purchases, leveraging its existing digital asset strategy for growth and diversification.
Utilizing the Raised Capital
A significant portion of the proceeds will be utilized to redeem $500 million in senior secured notes, thereby unlocking collateral that includes holdings of approximately 69,080 Bitcoins. MicroStrategy’s forward-thinking approach emphasizes the importance of digital assets as part of its long-term investment strategy.
Convertible Senior Notes Structure
The recently issued convertible senior notes come with an annual interest rate of 0.625%, payable semi-annually. MicroStrategy has outlined a conversion rate of 5.4589 shares of class A common stock per $1,000 principal amount of notes, translating to an estimated price of $183.19 per share – representing a substantial premium over recent stock prices.
Accelerating Bitcoin Acquisition Strategy
MicroStrategy plans to utilize the net proceeds of around $997.4 million for funding its ambitious Bitcoin acquisition strategy. With a strategic focus on increasing its Bitcoin reserves, the company aims to strengthen its position in the digital asset market and drive long-term value for shareholders.
Recent Bitcoin Acquisitions and Achievements
Among MicroStrategy’s recent Bitcoin acquisitions was an investment of around $1.11 billion, purchasing approximately 18,300 Bitcoins between August 6 and September 12 at an average price of $60,408 per Bitcoin. The company also celebrated a commendable BTC yield of 4.4% quarter-to-date and 17% year-to-date, showcasing a strong performance in the digital asset space.
Looking Ahead
MicroStrategy’s bold steps in securing substantial funding for Bitcoin acquisitions demonstrate its commitment to embracing digital assets as a core component of its financial strategy. With a clear focus on expanding its Bitcoin holdings and capitalizing on market opportunities, MicroStrategy continues to position itself as a leader in the evolving landscape of digital investments.
