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MicroStrategy Plans $600 Million Fundraising to Boost Bitcoin Holdings

Last Updated March 5, 2024 11:02 AM
Teuta Franjkovic
Last Updated March 5, 2024 11:02 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • MicroStrategy intends to issue $600 million in senior convertible notes to finance further Bitcoin acquisitions.
  • The company has revealed its second $600 million bond sale proposal within a span of less than a month.
  • MicroStrategy’s stock experienced strong surge on Monday, bolstered by Bitcoin’s approach towards record highs.

MicroStrategy has revealed  its intention to raise $600 million through a bond sale to purchase additional Bitcoin and for “general corporate purposes”.

This announcement , made on March 4, marks the firm’s second proposition  to sell $600 million in convertible senior notes in less than a month.

MicroStrategy Expands BTC Portfolio with $600 Million Bond Sale

MicroStrategy, one of the world’s largest Bitcoin investors  with 193,000 Bitcoin valued at nearly $13 billion, plans to increase its cryptocurrency holdings. The company said  it will issue unsecured senior obligations to qualified institutional buyers, with notes set to mature  in 2030.

Following the announcement, MicroStrategy’s stock experienced a significant 25% increase on Monday. This move coincided with Bitcoin’s rise to $67,000, nearing its November 2021 all-time high.

Unsecured senior notes , the method of fundraising chosen by MicroStrategy, are loans that do not require collateral. This means they are different from secured senior notes that are backed by specific assets.

Despite offering less security than other debt instruments, these notes promise investors a higher return rate. MicroStrategy said the notes will accrue interest, which will be paid out twice a year in arrears on March 15 and September 15, starting from September 15.

$90 Million Option for Early Investors

MicroStrategy has announced an additional incentive  for early buyers, granting them the option to acquire up to $90 million more in notes. This opportunity will be open to investors for a 13-day period starting from the initial issue date.

The company emphasized  that the completion of this offering is contingent upon market conditions and other factors. It noted there were no guarantees regarding the finalization, timing, or terms of the offering.

Bitcoin Demand Soars, Price Surpasses $68,000 Amid ETF Success

The surge in Bitcoin’s demand, propelling its price beyond the $68,000 threshold, has been significantly influenced by various factors.

Key drivers include the successful launch of 10 US spot Bitcoin exchange-traded funds (ETFs) in January and the anticipation of the halving event expected to occur in late April.

The price of Bitcoin (BTC) reached its highest point since November 2021, soaring to $68,848.62 at one moment. Ethereum (ETH) also experienced notable growth, increasing by over 5% to reach $3,650.59.

Both digital currencies saw their largest weekly increases in nearly a year, with Bitcoin’s value rising by around 21% and Ethereum’s by 16%. However, this upward momentum experienced a temporary halt over the weekend as the market responded to significant withdrawals from the Grayscale Bitcoin Trust (GBTC), offset by inflows into newly emerging Bitcoin exchange-traded funds (ETFs).

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