MicroStrategy Finalizes $800m Note Offering, Pushes Bitcoin Holdings Over 200,000
Summary:
MicroStrategy, a US-based software company, has completed an $800m convertible note offering, leading to the acquisition of 12,000 more Bitcoins for its treasury reserve. The company's founder, Michael Saylor, confirmed that they now hold more than 205,000 Bitcoins, purchased for around $6.91 billion. The notes, bearing a 0.625% annual interest rate, are convertible into cash, company shares, or a mixture of both. MicroStrategy initially started investing in Bitcoin in August 2020, as part of their treasury reserve strategy.
The US-based software company, MicroStrategy, recently finalized an $800 million convertible note offering. This venture includes the addition of nearly 12,000 BTC to its bitcoin treasury reserve. The company declared its intention for a new offering on March 6 when the value of Bitcoin hit a new record. On March 8, MicroStrategy successfully completed the private offering, the sold principal amount of which totaled $800 million.
MicroStrategy's founder and chairman, Michael Saylor, confirmed via a social media platform that the net proceeds of the note offering and leftover cash were used to secure 12,000 more Bitcoins, each averaging in cost at $68,477. He also highlighted that MicroStrategy's latest Bitcoin acquisition pushed its total Bitcoin holdings over 200,000.
Before this latest purchase, MicroStrategy owned around 193,000 Bitcoins, each bought at an average price of $31,544. This depicts a balance value of $12.9 billion and a 112% return since the company's inception. Saylor revealed that MicroStrategy now possesses 205,000 Bitcoins, obtained at the cost of $6.91 billion with an average price of $31,500 per coin.
Their latest note offering comes with a 0.625% annual interest rate, to be paid semi-annually in March and September from September 2024 onwards. The notes are convertible into cash, MicroStrategy shares or a combination of both.
The initial conversion rate for these notes is set at 0.6677 shares of MicroStrategy per $1,000 principal amount of notes valuing approximately $1,497.68 per share. This indicates a premium of about 42.5% over the most recent sale price of $1,051.01 per MicroStrategy share on the Nasdaq Global Select Market as of March 5, 2024.
August 2020 saw MicroStrategy create a stir by choosing to invest much of its capital directly into Bitcoin holdings. Initially, MicroStrategy invested $250 million, which gave them 21,454 BTC for their treasury reserves. This move was motivated by their view of Bitcoin as a dependable value store and attractive asset with a higher long-term appreciation potential than cash holdings.
MicroStrategy has since maintained its focus on Bitcoin as a superior investment to fiat currency and has made it the company's primary holding in its treasury reserve strategy. By early January 2024, their Bitcoin holdings had already climbed by over $1 billion.
Published At
3/11/2024 3:38:55 PM
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