MicroStrategy announced on Monday evening that it plans to raise $1.75 billion through convertible notes to purchase more Bitcoin and for "general corporate purposes." These zero-coupon senior notes will mature in 2029 and are primarily aimed at qualified institutional buyers. If all goes well, the company expects to acquire up to 19,000 additional Bitcoins.
Prior to this, MicroStrategy had swiftly put its recent Bitcoin purchases to use. According to the latest news, the company purchased an additional $4.6 billion worth of Bitcoin on Monday, bringing its total holdings to 331,200 BTC, with a total value now exceeding $30 billion at current prices.
Leaders' confidence and market response
Michael Saylor, co-founder and executive chairman of MicroStrategy, promoted this acquisition on social media, emphasizing the company's current total Bitcoin holdings. According to documents from the U.S. Securities and Exchange Commission (SEC), the company purchased 51,780 Bitcoins at an average price of $88,627 per Bitcoin, totaling $4.6 billion. MicroStrategy's Bitcoin reserves were acquired at a total price of $16.5 billion, but their value has significantly increased due to recent price surges.
According to MSTR Tracker data, MicroStrategy currently owns 1.58% of the maximum supply of 21 million Bitcoins, with an average cost of $49,874 per Bitcoin. This data highlights MicroStrategy's significant position in the Bitcoin market.
Wall Street's attention and stock market performance
MicroStrategy's aggressive strategy has garnered widespread attention on Wall Street. Vanguard Group and Capital International Investors purchased 15.9 million and 15.8 million shares of MicroStrategy stock in the last quarter, respectively, while Morgan Stanley also increased its holdings by 8.8 million shares on Thursday, a 1126% increase from the previous quarter. The active participation of these investors further proves the market's recognition of MicroStrategy's Bitcoin strategy.
According to Portfolio Lab data, despite Bitcoin rising 112% this year, MicroStrategy's stock (MSTR) has skyrocketed 485%. This indicates that MicroStrategy's Bitcoin investment strategy is yielding substantial returns for the company.
From business intelligence to Bitcoin financial company
MicroStrategy has transformed from a traditional business intelligence company into 'the world's first and largest Bitcoin financial company.' Its market capitalization has surged from $1.5 billion to over $40 billion in just four years. Saylor attributes this growth to the company's innovative approach of combining Bitcoin with traditional financial markets. He stated, 'MicroStrategy is pioneering a new market; we are issuing securities backed by digital capital.'
Notably, MSTR's volatility is 32%, higher than Bitcoin's 16%. This means that while MicroStrategy holds a significant position in the Bitcoin market, its stock also experiences greater risk and return fluctuations.
Future outlook and plans
In October, MicroStrategy announced its ambitious '21/21' plan to raise $42 billion over three years for more Bitcoin purchases, with funds to be evenly split between stocks and bonds. The company stated that it will discuss its latest financing plans in a webinar on Tuesday morning, but attendance is limited to qualified institutional buyers.
