MicroStrategy (MSTR) has completed the issuance of $3 billion in convertible bonds maturing in December 2029 at a 0% interest rate, intending to use part or all of this amount to buy more Bitcoin.
The business analytics company announced completion when the company's stock had increased by over 25% on November 21, data from Google Finance shows.
The senior convertible bonds have a 55% spread with an implied conversion price of about $672 — a price predetermined at which the holder of the option can buy or sell Class A shares of MicroStrategy.
Source: Michael Saylor
The lack of periodic interest payments to the holders of this senior convertible bond means it will not pay regular interest. These convertible bonds are sold at a discount and will mature at par value if not converted before the maturity date.
They also have priority over common stock in the event of bankruptcy or liquidation.
MicroStrategy could buy approximately 30.6 thousand Bitcoin (BTC) if it allocated the entire $3 billion for Bitcoin purchases.
The $3 billion issuance follows MicroStrategy's announcement on November 18 of raising $1.75 billion at a 0% interest rate, which was then increased to $2.6 billion on November 20.
These issuances are part of MicroStrategy's bold plan to raise $42 billion over the next three years to accumulate more Bitcoin under the '21/21' plan — including $21 billion from equity and $21 billion from fixed-rate bonds.
Currently, MicroStrategy holds 331,200 Bitcoin worth over $32.7 billion — the most among public companies — according to Saylor Tracker.
The change in MSTR stock price on November 21, including a 5.3% recovery in after-hours trading. Source: Google Finance
The drop occurred when Citron Research revealed they had taken a short position on MSTR, claiming that MSTR stock had become 'too hot' and its volume had 'completely detached from the Bitcoin base.'
MSTR remains one of the best-performing stocks in the U.S. market in 2024, up 480% year-to-date.
On November 20, it was the second most traded stock in the U.S. as many investors considered the bullish case and the risks of exposure to Bitcoin through MSTR.
Michael Saylor's company contributed to a record trading volume of $70 billion on November 21 coming from the 'Bitcoin industrial complex' — including U.S. spot Bitcoin funds and Bitcoin-related stocks like MSTR and Coinbase (COIN).
Currently, Bitcoin is priced at $98,423 — about 1.5% short of reaching the $100K mark, data from CoinGecko shows.
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