MicroStrategy Plans $700 Million Fundraising for Bitcoin Acquisitions
Business intelligence firm MicroStrategy, under the leadership of Bitcoin advocate Michael Saylor, revealed its plan on Monday to issue $700 million in convertible senior notes due 2028. This move is part of a broader strategy to bolster its Bitcoin portfolio while restructuring existing debt.
The proposed notes, as stated in the announcement, will be unsecured, senior obligations of MicroStrategy and are anticipated to accrue interest payable semi-annually starting March 15, 2025. These notes are set to mature on September 15, 2028, unless repurchased or converted earlier under specified conditions. Additionally, the company intends to provide initial purchasers with an option to acquire up to an additional $105 million in notes within a 13-day window following the initial issuance.
The primary aim of this offering is to utilize the proceeds to redeem MicroStrategy’s existing $500 million in 6.125% Senior Secured Notes due 2028. This redemption not only alleviates the company’s debt burden but also frees up collateral previously securing these notes, which includes approximately 69,080 BTC.
Moreover, MicroStrategy announced that the redemption is scheduled for September 26, 2024, contingent upon the successful closing of the new notes offering to eligible investors. This development comes on the heels of MicroStrategy’s recent acquisition of 18,300 Bitcoin valued at around $1.11 billion, bringing the company’s total Bitcoin holdings to approximately 244,800 BTC.
This significant investment represents about 1% of all Bitcoins ever issued, solidifying MicroStrategy’s position as a prominent institutional holder of the largest cryptocurrency in the market. The total investment in BTC by MicroStrategy now stands at approximately $9.45 billion, with an average purchase price of around $38,585 per Bitcoin.
At the time of writing, Bitcoin is priced at $57,760, marking a 3.5% decline in the past 24 hours. Despite this, BTC has maintained a 1.5% gain in the weekly timeframe. However, longer time frames indicate a bearish trend, with losses of 1.4% and nearly 3% in the fourteen and thirty-day periods, respectively, according to CoinGecko data. The trading volume has seen a significant increase in the last 24 hours, rising by 125% to nearly $32 billion.
The upcoming week may witness further price volatility for Bitcoin as lower support levels are tested ahead of the Federal Reserve’s rate cut announcement. It remains to be seen how BTC will navigate these challenges in the market.
