MicroStrategy offers $500M more in bonds for bitcoin purchase #2

  • MicroStrategy, a software provider, plans to use convertible bonds to purchase bitcoin for the second time in less than 10 days, driven by its goal to expand its presence in the rapidly growing cryptocurrency market.
  • On Wednesday, MicroStrategy disclosed an offering of $500 million in convertible notes due in 2031 to institutional investors, following a previous $600 million convertible notes launch on March 5.
  • MicroStrategy, having commenced its acquisition and retention of bitcoins in 2020, acquired 15,000 bitcoins since February 15, bringing its total holdings to 205,000 as of March 10.

OUR TAKE
Amidst the volatile crypto market conditions, MicroStrategy continues to purchase more bitcoins. MicroStrategy purchases bitcoins as part of its corporate strategy to diversify its asset holdings and hedge against inflation. CEO Michael Saylor has publicly stated that he views bitcoin as a store of value and a hedge against currency devaluation. Overall, investing in bitcoins can be viewed as a strategic decision to safeguard and potentially grow wealth in today’s evolving financial landscape. Moreover, bitcoins present the opportunity for long-term capital appreciation, given their finite supply and increasing adoption as a store of value.

–Sylvia Shen, BTW Reporter

MicroStrategy, a software solution provider, aims to raise funds via convertible bonds to buy bitcoin for the second time in under 10 days. This move is driven by their desire to increase exposure to the rapidly expanding cryptocurrency market.

MicroStrategy announces another $500M convertible notes offerings

Following the Wednesday market close, the software company announced its offering of $500 million in convertible notes due in 2031 to institutional investors. On March 5, the business had already launched a $600 million convertible notes.

Convertible notes provide companies with the opportunity to raise capital at reduced interest rates compared to traditional bonds, all without the immediate risk of diluting shareholders, as seen in stock offerings. These notes can be converted into shares once the stock reaches a predetermined threshold.

Based on LSEG IFR data, MicroStrategy is offering the corporate bonds at a yield between 0.375% and 0.875%, with a conversion option available when the stock rises between 40% and 45% above current levels.

Also read: MicroStrategy boosts bitcoin reserves with $600M senior notes offering

Expert insight: MicroStrategy’s bitcoin investments

Following a 24-year high, MicroStrategy’s shares fell by 7% on Thursday.

This year, the stock has experienced an almost threefold surge in value.

Michael O’Rourke, chief market strategist at JonesTrading, an executing equity trading firm, commented on MicroStrategy’s move: “MicroStrategy is now single handedly making it clear there is nothing restrictive about the (monetary) policy environment.

“Since late 2020, the company has come to market with convertible offerings and to a lesser extent at-the-market stock offerings for the specific purpose of investing the proceeds in bitcoin. It appears it is now becoming a weekly event.”

Also read: Hackers pilfer $440K from fake MicroStrategy airdrop news on X

Leading corporate bitcoin holder

MicroStrategy, which initiated its acquisition and retention of bitcoins in 2020, stands as the largest corporate holder of the bitcoin.

Since February 15, the corporation has purchased 15,000 bitcoins, bringing its total holdings as of March 10 to 205,000.

Sylvia-Shen

Sylvia Shen

Sylvia Shen, a news reporter at BTW media dedicated in Fintech and Blockchain. She graduated from University of California, Davis. Send tips to s.shen@btw.media.

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