American business intelligence company, MicroStrategy, has announced its plan to secure more Bitcoins, adding to its vast portfolio. The funds for this acquisition will be raised by offering $700 million worth of convertible senior notes. The company has been a big Bitcoin proponent for years, strategically purchasing substantial amounts of the coin as future investments.
This would be the company’s third debt offering for the year and comes shortly after its recent acquisition of $1.1 billion worth of Bitcoin. On September 13, MicroStrategy announced that it had bought 18,300 Bitcoins at an average price of $60,408 per BTC. This solidified its position as the top Bitcoin corporate holder globally.
MicroStrategy to Epand Bitcoin Holdings
In a recent post on X (formerly Twitter), Michael Saylor, the executive chairman and co-founder of MicroStrategy revealed that the company has announced a proposed private offering of $700 million of convertible senior notes. In a press release, the public company disclosed that the proceeds from the sales would be used to redeem $500 million outstanding aggregate principal.
MicroStrategy Announces Proposed Private Offering of $700M of Convertible Senior Notes $MSTR https://t.co/OCq7wj2u0P
— Michael Saylor (@saylor) September 16, 2024
Moreover, any balance left from the net proceeds will be targeted toward acquiring more Bitcoins and for other corporate purposes. The announcement explains that the notes will be unsecured, senior obligations of MicroStrategy, and will mature four years from now, on September 15, 2028. Also, the notes will bear semi-annual interest payable in arrears on March 15 and September 15 every year starting from March 15, 2025.
Importantly, MicroStrategy may redeem the notes for cash on or after December 20, 2027, if certain conditions hold. “If MicroStrategy redeems fewer than all the outstanding notes, at least $75 million aggregate principal amount of notes must be outstanding and not subject to redemption as of the relevant redemption notice date,” the statement reads.
Holders of the notes can convert it into cash or shares of MicroStrategy’s class A common stock, or both at MicroStrategy’s election. MicroStrategy also noted that the notes would be offered only to persons who are believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act.
MicroStrategy Bitcoin Approach
MicroStrategy’s latest plan to increase its Bitcoin coffers is in line with its broader strategy to turn to Bitcoin as a store of value. The company has aggressively purchased the flagship cryptocurrency over the last few years. Consequently, MicroStrategy now holds 244,800 BTC, valued at approximately $14.4 billion.
According to data from the Saylor tracker website, a service that tracks MicroStrategy’s Bitcoin portfolio, the company has acquired Bitcoin 43 times starting from September 2020 with a dollar cost average of $ 38,781.05. Also, the firm has spent $9.4 billion in its total Bitcoin acquisition.
Source: Saylor Tracker
Meanwhile, the price of Bitcoin has experienced high volatility over the past week. The recent news of MicroStrategy’s acquisition plan, even though bullish, has not had any impact on the price of the coin. In fact, at the time of writing, data from CoinMarketCap shows that BTC declined by 0.46% to trade at $58,617 with a 24-hour trading volume of $24.2 billion.
The post MicroStrategy to Increase Bitcoin Holdings Following $700 Million Senior Notes Offering appeared first on Coinfomania.
