MicroStrategy, a business intelligence firm, recently announced its plan to conduct a private sale of $600 million worth of convertible senior notes. The company intends to use the funds to buy more Bitcoin (BTC) and cover its corporate expenses. However, MicroStrategy has now increased its convertible debt offering by an additional $100 million.
The Firm now holds 193K bitcoin. The company’s executive chairman, Michael Saylor, believes in the potential of Bitcoin and terms it as the most popular investment asset.
The company has further classified that the interest rate, conversion rate, conversion price, and certain other terms of the notes will be determined at the time of pricing of the offering and that the notes will be offered and sold to persons reasonably believed to be qualified institutional buyers according to Rule 144A under the Securities Act.
MicroStrategy’s Bold Expansion in Bitcoin Investment
Microstrategy in 2021 had announced a similar plan to raise $600 million through convertible senior notes to acquire more Bitcoins. Its shift from $600 million to $700 million displays Saylor’s unwavering confidence in the growth prospects of Bitcoin.
The notes initial interest rate will be of 0.625% per annum, payable semi-annually. Initial purchasers can purchase an additional $100 million worth of notes within a 13-day window following the issuance.
The rights and options afforded to holders of the notes aim to provide flexibility and potential benefits for investors. Holders can repurchase on demand, on September 15, 2028, or upon specified fundamental changes. The conversion options are – cash, shares of MicroStrategy’s class A common stock, or a combination. These options will interest the investors.
This expansion in the plan stems from a volatile trading session where MicroStrategy saw its share price went down over 15%. The change in its plans depict the company’s interest and proactive response to shift in market sentiments and to optimise its crypto holdings by issuing these notes.
In a previous interview with Bloomberg, the MicroStrategy CEO, Michael Saylor had announced that he would never sell his Bitcoin (BTC) holdings and had compared Bitcoin to real estate and gold, saying that BTC is far superior to them. The US spot ETFs have had inflows pulling in for the Bitcoin ecosystem, riding its prices real high. Microstrategy believes itself to be the ‘bitcoin development company’.
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