MicroStrategy, the prominent tech firm led by Bitcoin advocate Michael Saylor, has announced its plans to raise $1.75 billion from senior convertible note sales primarily to fund its Bitcoin acquisition.
MicroStrategy’s stock was up 13% at market close Monday. The market loves the company and it has been right about Bitcoin prices for years. On Wall St. money talks, so MicroStrategy’s new venture should be well liked.
In a statement published on Nov. 18, MicroStrategy said the notes, aimed at qualified institutional buyers and certain non-U.S. persons, will be offered at a 0% interest rate.
More BTC For MicroStrategy!
The notes are set to mature on December 1, 2029. Investors have the option to convert their debt into cash, MicroStrategy’s Class A common stock, or a combination of both, subject to certain conditions and timing.
It was not the first time MicroStrategy borrowed money through convertible note offerings. In September, it raised over $800 million in convertible senior notes to redeem senior secured notes and purchase additional Bitcoin. The notes will mature in 2028.
Plus, in June, the company issued convertible notes with a maturity date of June 15, 2032, aiming to finance its Bitcoin purchases.
Raising capital is part of MicroStrategy’s plan to accumulate more Bitcoin. Its target for the three years is to raise $42 billion, including $21 billion in equity and $21 billion in fixed-income securities.
They Just Keep Buying
The latest announcement came shortly after the company announced it had acquired 51,780 Bitcoin for about $4.6 billion. Since revealing its 21/21 plan, the company has bought nearly 80,000 BTC.
MicroStrategy’s buying spree has solidified its position as one of the largest corporate holders of Bitcoin. Not only that, its aggressive buying has outpaced that of the group of US-listed Bitcoin ETFs, also known for massive BTC accumulation.
According to HODL15Capital, US funds tracking Bitcoin’s prices have acquired around 38,615 BTC as of Nov. 15. BlackRock’s iShares Bitcoin Trust (IBIT) dominated the group with over 37,000 BTC.
Following the news, MicroStrategy’s stock (MSTR) jumped 13% to a record high of above $380 at market close today. The stock has experienced a remarkable growth of approximately 500% in 2024 alone.
With an average purchase price of around $88,627 per Bitcoin, MicroStrategy’s Bitcoin holdings are valued at over $30 billion, resulting in unrealized profits of about $13.7 billion.
Global Buying Spree
A number of companies also announced plans to raise capital through bond and note offerings this week.
Leading Bitcoin miner MARA Holdings, or Marathon Digital, said Monday it looked to raise $700 million through a private offering of convertible senior notes.
The proceeds from this offering will be used primarily for acquiring more Bitcoin, as well as for debt repayment and general corporate purposes. MARA currently holds around 25,945 Bitcoins, valued at approximately $2.3 billion.
As noted in its announcement, MARA’s proposed notes will bear interest payable semi-annually and are set to mature on March 1, 2030. Holders of the notes will have the option to convert them into cash, shares of Marathon stock, or a combination of both.
Tokyo-listed company Metaplanet announced today an additional ¥1.75 billion (approximately $11.3 million) investment in Bitcoin, acquiring 124,117 BTC.
The move came a day after the firm said it would issue ¥1.75 billion in one-year ordinary bonds to fund Bitcoin purchases. These bonds carry an annual interest rate of 0.36% and are set to mature on November 17, 2025.
The new purchase brings the company’s total Bitcoin holdings to a substantial 1,142 BTC, valued at over $104 million at current Bitcoin prices.
The move is consistent with Metaplanet’s ongoing strategy of accumulating Bitcoin. The company has invested heavily in Bitcoin since earlier this year as it adopts a similar approach to MicroStrategy.
Investors have direct and indirect ways to own Bitcoin. As prices continue higher, more investors will likely join in.
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