MicroStrategy Issues $600 Million in Bonds to Acquire More Bitcoin

MicroStrategy, a publicly traded company holding $13.3 billion in Bitcoin (BTC), has announced a private placement of $600 million in convertible bonds targeted at institutional investors. The company intends to utilize the proceeds to purchase additional BTC.

MicroStrategy Issues $600 Million in Bonds to Acquire More Bitcoin. Image: Blockworks

Additionally, MicroStrategy will provide bondholders with warrants to purchase up to $90 million within 13 days from the initial issuance date.

The convertible bonds will mature on March 15, 2030, unless redeemed or converted earlier as per the terms. The warrants can be converted into cash, MicroStrategy's Class A common stock, or a combination of both.

The company's stock price, known for its Bitcoin reserve strategy, surged over 23% during early-week trading sessions in the United States. However, the upward momentum was short-lived until MicroStrategy's CEO and co-founder Michael Saylor announced the bond issuance plan.

MicroStrategy's Stock Price Movement in the Last 24 Hours. Source: Google Finance

Simultaneously, the world's largest cryptocurrency also experienced impressive gains last night, officially surpassing $68,686 and setting new all-time highs in several countries, coming within 300 of its previous peak.

MicroStrategy began seriously investing in Bitcoin in 2020 and has held onto its position despite prolonged losses. Since then, the market capitalization has surpassed $22 billion, increasing the company's value tenfold.

With an average purchase price of $31,780, MicroStrategy's massive Bitcoin portfolio is currently valued at over $13.3 billion, marking a provisional profit of $7.1 billion. Last month, the company acquired an additional 3,000 Bitcoin, bringing its total holdings to 193,000 BTC.

MicroStrategy's Bitcoin Acquisition History. Source: Saylor Tracker (05/03/2024)