Nasdaq-listed company MicroStrategy announced on Monday that it intends to raise $700 million through the sale of "convertible bonds". The proceeds will be used to repurchase corporate debt and increase investment in Bitcoin.
According to MicroStrategy's statement, the company will sell "Convertible Senior Notes (a type of senior debt)" with an aggregate principal amount of US$700 million to qualified institutional buyers through a private placement. The convertible bonds can Converting into shares of the issuing company at a specific time avoids the need to sell shares, which could hurt the stock price.
The notes are unsecured senior notes of MicroStrategy, pay interest semiannually (March 15, September 15 each year) beginning on March 15, 2025, and will mature on September 15, 2028, unless Early repurchase, redemption or conversion in accordance with its terms.
MicroStrategy Announces Proposed Private Offering of $700M of Convertible Senior Notes $MSTR https://t.co/OCq7wj2u0P
— Michael Saylor (@saylor) September 16, 2024
The press release stated that MicroStrategy plans to use the proceeds from this issuance to redeem $500 million in senior secured bonds that also mature in 2028, and the remaining funds will be used to purchase more Bitcoins and the company’s general Operational purposes.
Over the past few years, MicroStrategy has done everything possible to raise money in Bitcoin. In addition to multiple issuances of convertible bonds and stocks, it also issued US$500 million of "junk bonds". It even used Bitcoin as collateral to obtain a term loan of approximately US$200 million from banks, and then purchased more Bitcoins. currency.
As of June this year, MicroStrategy's total liabilities have reached US$3.9 billion; while the book profit (floating profit) from investing in Bitcoin is currently approximately US$4.89 billion.
MicroStrategy currently holds approximately 244,800 Bitcoins. According to documents submitted to the U.S. Securities and Exchange Commission (SEC) last week, MicroStrategy recently invested US$1.11 billion and purchased an additional 18,300 Bitcoins. This is the company’s largest investment since 2021. Bitcoin investment.
MicroStrategy shares fell sharply along with Bitcoin on Monday, falling about 4.9% during regular trading and falling another 1.6% in after-hours trading. Still, the company's shares are up about 300% in the past year.
"Tear down the east wall to pay for the west wall? MicroStrategy will issue bonds to raise US$700 million to repurchase debt and increase its holdings of Bitcoin." This article was first published on (Block Guest).
