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MicroStrategy to buy additional bitcoins with net proceeds of a $600 million private offering

  • MicroStrategy announces a private offering of $600 million to institutional buyers.
  • The net proceeds of the offering will be used to buy additional bitcoins.
  • MicroStrategy currently holds 71,079 bitcoins worth nearly $3.5 billion.

MicroStrategy’s appetite for bitcoin has taken another interesting turn after the company made a major announcement today.

The business intelligence software company revealed its intention to raise $600 million to buy more bitcoins.

$600 million of convertible notes

Per the press statement, MicroStrategy “intends to offer, subject to market conditions and other factors, $600 million aggregate principal amount of convertible senior notes due 2027 (the “notes”) in a private offering to qualified institutional buyers.”

A senior convertible note is a debt security that offers an option for the note to be converted into shares of the issuing company, in this case, MicroStrategy.

The initial investors to buy the notes have the option to purchase “an additional $90 million aggregate principal amount of the notes” within a 13-day period starting on the day the notes were first issued.

These are unsecured notes that bear interest payable semi-annually in arrears on Feb. 15 and Aug. 15 of each year, starting this year on Aug. 15.

The notes are expected to mature on Feb. 15, 2027, unless if they are repurchased, redeemed, or converted.

Bitcoin purchases

The funding raised from the offering will be used to purchase additional bitcoins by the company.

“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoins.”

MicroStrategy doesn’t seem to get enough of the leading asset and has made similar moves in the past to finance the purchase of bitcoins.

In December, MicroStrategy announced plans to raise $400 million through convertible bonds to buy more bitcoins. 

At the time, it held a total of 40,284 bitcoins and as of Feb. 2, the company owns 71,079 bitcoins.

Bitcoin buying spree

The debt offering comes shortly after carmaker Tesla revealed that it bought bitcoins worth $1.5 billion.

Tesla’s announcement caused bitcoin’s price to rise more than 14% within hours.

Bitcoin surpassed $50K for the first time around the same time MicroStrategy’s announcement was made. The digital asset has since retraced back to just over $42,250.

At the current market rate, bitcoin’s holdings are worth nearly $3.5 billion.

MicroStrategy’s CEO Michael Saylor held the “Bitcoin for Corporations” conference where he pitched bitcoin to company executives.

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