MicroStrategy Doubles Down on Bitcoin Investment with $700M Raise

Microstrategy recently revealed it plans to purchase more Bitcoin. This comes after its announcement that it raised $700 million for this cause.

Michael Saylor, CEO of the company, cited in the press release that his company plans to issue $700 million senior convertible notes, explicitly aimed at increasing its Bitcoin holdings. These convertible senior notes, a type of debt instrument, offer the ability to convert into common stock within a specified timeframe, potentially replacing traditional investment methods by providing an avenue for equity conversion.

The organization stated that these notes would have fixed interest rates of 0.625% and come to term in 2030. Buyers can buy these notes with cash, MicroStrategy common stock, or a combination of both depending on the option exercised by Microstrategy.

Currently, the conversion rate is at about $1,497.68 per share, which is 42.5% more competitive than the closing stock price of MicroStrategy before the announcement.

This is a $100 million increase from the initial $600 million proposal. The added funds are an option for initial buyers to purchase additional notes.

Microstrategy Bitcoin Purchases

Currently, MicroStrategy’s portfolio, which amounts to about 193,000 BTC secured at an average buying cost of around $31,544 a coin makes almost 1% of the total circulating supply of the cryptocurrency.

Last month, the firm announced it had recently added 3,000 BTC to its holdings. This sparked a huge buying frenzy in the crypto market. As a result, other institutions followed suit with several buying to fund their ETFs.

In the wake of all these purchases, the price of the coin soared. Due to this, its holding more than doubled as the asset’s price surged to $65,000 on Monday. The value of its wallet has soared to $12.68 billion, marking a 106.68% increase from its previous capital of $6.13 billion.

Nonetheless, Microstrategy holds the largest Bitcoin exposure among publicly traded companies. Since its initial acquisition in September 2020, the firm has consistently increased its holdings of the leading cryptocurrency. It has continued this strategy despite market downturns and endured periods of unrealized losses.