On Monday, U.S.-based Microstrategy, a publicly traded business intelligence (BI) company, announced plans to privately offer $700 million in convertible senior notes. BI plans to raise the funds to pay off existing debt and buy more bitcoin.
Microstrategy Unveils Another Private Offering
The bonds, which are set to mature in 2028, will be offered to institutional investors, subject to market conditions, according to an announcement by Microstrategy (Nasdaq: MSTR). Microstrategy plans to use the proceeds to redeem $500 million in senior secured notes and, if funds remain, to continue increasing its bitcoin (BTC) holdings.
MSTR shares fell 4.91% on Monday but have gained 9.37% over the past week. The senior secured notes, totaling $500 million with a coupon of 6.125%, are expected to be repaid on September 26, 2024, if the offering is successful.
The bonds are backed by 69,080 bitcoins and will be issued upon repayment. Microstrategy reaffirms its strategy of using bitcoin as a key treasury reserve asset while actively increasing its BTC holdings.
The offering comes after Microstrategy recently acquired 18,300 bitcoins for $1.11 billion, bringing its total bitcoin holdings to 244,800 BTC. Now valued at $14.15 billion, the company's bitcoin portfolio has grown by 50%, thanks to a combination of strategic fixed-period purchases and bitcoin's price growth.
Microstrategy's focus on balancing debt reduction and bitcoin accumulation remains central to the company's broader financial goals. In addition to exchange-traded funds (ETFs) like Blackrock's IBIT and Grayscale's GBTC, Microstrategy holds the largest bitcoin holdings of any public company in the world.
What do you think about Microstrategy’s latest plans? Share your thoughts and opinions on the subject in the comments section below.
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